Annuities can ensure you have income once you retire. However, the amount you receive each month depends on many factors, including your gender and age. For example, if you purchase an annuity at an older age, then your payment will be higher.
The data below helps clarify your potential annuity payments. Understanding these figures is key to securing a stable financial future, particularly if you’re considering how a $250,000 annuity can work within your retirement plan.
Monthly Payouts for $250,000 Immediate Lifetime Annuity
| Age | Male | Female | Joint Life |
| 60 | $1,633 | $1,458 | $1,345 |
| 65 | $1,633 | $1,574 | $1,430 |
| 70 | $1,835 | $1,747 | $1,555 |
| 75 | $2,151 | $2,006 | $1,734 |
| 80 | $2,641 | $2,425 | $2,023 |
Looking at the chart above, you can see that men, no matter their age, will always receive a higher payout. This is because men typically have shorter life expectancies than women. Joint life policies will always have the lowest amount since they are for two people instead of one.
This data has also shown that as you get older, your payout will increase. If you wait longer to start taking payouts from your annuity, it will grow more money while in the tax-deferred stage. If you are working part-time or have another type of income, it could be a good decision to wait as long as possible before receiving your annuity payouts.
Annual Percentage* Payouts for $250,000 Immediate Lifetime Annuity
| Age | Male | Female | Joint Life |
| 60 | 7.84% | 7.00% | 6.46% |
| 65 | 7.84% | 7.56% | 6.86% |
| 70 | 8.81% | 8.39% | 7.46% |
| 75 | 10.32% | 9.63% | 8.32% |
| 80 | 12.68% | 11.64% | 9.71% |
Today’s Best Fixed Annuity Rates by Term
| Term | Rate | Provider | Product | AM Best Rating |
|---|---|---|---|---|
| 1 Year | 6.00% | Global Atlantic | ForeCare Fixed Annuity (LTC) | A |
| 2 Years | 5.55% | Axonic Insurance Services | Skyline MYGA | A- |
| 3 Years | 6.00% | Wichita National Life Insurance | Security 5 MYGA | B+ |
| 4 Years | 5.50% | Nassau Life and Annuity Company | Simple Annuity | B++ |
| 5 Years | 6.45% | Knighthead Life | Staysail | A- |
| 6 Years | 6.20% | Atlantic Coast Life | Safe Harbor Bonus Guarantee | B+ |
| 7 Years | 6.70% | Knighthead Life | Staysail | A- |
| 8 Years | 5.40% | Clear Spring Life and Annuity Company | Preserve Multi-Year Guaranteed Annuity | A- |
| 9 Years | 5.40% | Clear Spring Life and Annuity Company | Preserve Multi-Year Guaranteed Annuity | A- |
| 10 Years | 7.05% | Atlantic Coast Life | Safe Harbor Bonus Guarantee | B+ |
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Real-World Examples: Ellie, Nate, Janelle and Victor
The following three scenarios illustrate how different factors influence the payout of a $250,000 annuity. These case studies use hypothetical estimates to give you a general idea of how different customers might receive different payouts for the same premium amount.
We used Cannex data to calculate these payout estimates.
Scenario 1 – Ellie
Name: Ellie
Age: 65
Looking to invest: $250,000
- Ellie wants guaranteed income she can’t outlive.
- She purchases an immediate annuity with a single life payout.
Monthly payout: $1,498
In this case study, Ellie has recently retired and has concerns about outliving her savings. By purchasing a $250,000 immediate single life annuity, Ellie could receive monthly payouts of $1,948 a month, or $17,979 a year.
Ellie’s immediate annuity has no period certain guarantee. If she passes away before receiving the full return of her premium, no remaining payments will go to her beneficiary.
Scenario 2 – Nate
Name: Nate
Age: 68
Looking to Invest: $250,000
- Nate wants a guaranteed income stream in retirement.
- He purchases an immediate annuity with a lifetime payout.
Monthly payout: $1,685
Retiree Nate purchases the same $250,000 immediate annuity as Ellie but receives $1,685 in monthly payments. Why is Nate’s payout so much higher than Ellie’s if they both invested the same premium amount?
Aside from the premium amount, the most important factor in calculating an annuity’s monthly payouts is the annuitant’s life expectancy. The longer your remaining life expectancy, the lower your payouts will be each month because the insurance company expects to have to pay you for longer.
Nate’s payments are higher than Ellie’s because he has a shorter remaining life expectancy. The older you are, the higher your monthly payout will be.
Nate’s gender also affects his higher payouts because men have a lower life expectancy than women. A 68-year-old woman purchasing a $250,000 annuity could receive payouts of $1,593 a month or $19,116 a year.
Scenario 3 – Janelle and Victor
Names: Janelle and Victor
Ages: 70 and 70
Looking to Invest: $250,000
- Janelle and Victor want to ensure that neither of them outlives their retirement savings.
- They purchase a joint life annuity that guarantees payments for both of their lifetimes.
Monthly payout: $1,482
Janelle and Victor purchased a joint and survivor annuity, which guarantees payments for the rest of both of their lives. Their $250,000 immediate annuity generates $1,482 in monthly payments, or $17,781 a year.
Though they are a few years older than Nate, Janelle and Victor’s annuity pays significantly less each month. Because the annuity’s payment guarantee extends to two lifetimes, the insurance company expects to have to make payments for longer than a single-life annuity. Therefore, the payouts from joint life annuities are significantly lower than what a single life annuity would pay.
My clients prefer annuities with income riders for predictable retirement income. I recently helped a client with $250K who wanted income right away. I compared an immediate annuity and a fixed index annuity (FIA) with a Lifetime Income Benefit Rider (LIBR). The FIA provided better results, offering $19K annually for life based on his age and investment horizon. He liked the predictable income and the option to access a lump sum in the future, helping him supplement Social Security and reach his financial goals.
Aamir Chalisa, MBA, LUTCF, MDRT
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Factors Impacting How Much a $250,000 Annuity Pays per Month
Annuity companies calculate payouts differently for every annuity contract.
Annuity Payout Factors
- Annuitant’s life expectancy: The person whose life expectancy determines an annuity’s payout is called the annuitant. The longer the insurance company expects an annuitant to live, the longer they have to pay out a lifetime annuity, so payments will be lower. This is why men and older people typically receive the highest monthly payments.
- Payout option: Lifetime annuities are popular, but they aren’t the only payout option for an annuity. You could opt to have an annuity pay out for a certain number of years; if that amount of time is less than the annuitant’s life expectancy, then the monthly payments might be higher than a lifetime annuity.
- Type of annuity: The payout calculations on this page assume that the customers are purchasing immediate annuities, but there are many other types of annuities to choose from. Most non-immediate annuities accumulate interest before converting into income payments, so the payout amounts for these products can be harder to predict.
- Riders: When you purchase an annuity, you can customize the contract with riders for an additional fee. The amount of your payouts can change depending on certain riders, such as a cost of living rider that increases the monthly payments by a small percentage each year to offset inflation.
The scenarios above illustrate some of the ways these factors influence the monthly payout of a $250,000 annuity.
Editor Norah Layne contributed to this article.
