How Much Does a $500,000 Annuity Pay Per Month?

Annuities help ensure you have income when you choose to retire, but your payout amount can differ based on a number of factors. One factor that matters is your age. If you purchase an annuity at an older age, then your payment will be higher.

Annuity.org used data from Cannex, an independent company that provides access to a database of updated annuity products, to calculate the expected monthly payments of a $500,000 annuity. By examining the data below, you’ll gain a better understanding of your potential annuity payments. These insights are crucial for anyone looking to integrate a $500,000 annuity into their long-term retirement planning.

Monthly Payouts for $500,000 Immediate Life Annuity

Age	Male	Female	Joint Life
60	$3,002	$2,919	$2,693
65	$3,269	$3,151	$2,863
70	$3,671	$3,498	$3,113
75	$4,304	$4,014	$3,470
80	$5,284	$4,853	$4,048

As with annuities of other values, the older you are when you start receiving payouts, the better your monthly payout will be. This all has to do with the fact that the annuity will have to send out fewer payouts if you wait until you are 80 years old compared to 65 years old. If you have another source of income, it is recommended to wait as long as possible to start receiving your annuity payouts.

The chart also shows that females will receive less overall in their monthly payouts than men. Since women are projected to live longer than men, annuity payments will be lower. Joint life payments are also always shorter because they cover two people instead of just one. 

Annual Percentage* Payouts for $500,000 Immediate Lifetime Annuity

Age	Male	Female	Joint Life
60	7.20%	7.01%	6.46%
65	7.85%	7.56%	6.87%
70	8.81%	8.40%	7.47%
75	10.33%	9.63%	8.33%
80	12.68%	11.65%	9.72%

Real-World Examples: Ted, Ella & Irene

To understand how different factors impact the approximate payout of a $500,000 annuity, let’s look at three scenarios. These case studies represent hypothetical estimates and are meant to give you a general idea of how different customers might receive different payouts for the same premium amount.

These payout estimates were calculated using Cannex data.

Meet Ted — Maximizing Lifetime Income in Retirement

Ted invests $500,000 in an immediate lifetime annuity, which pays him $4,269 a month — about $51,228 a year — for the rest of his life.

Why He Chose a Single Life Annuity

Ted’s annuity is a single-life policy, meaning payments will continue only until his death. This option offers the highest monthly payout because it does not include a death benefit or period certain guarantee. If Ted passes away before receiving the full value of his premium, the remaining funds will stay with the insurance company.

Why This Works for Ted:

• Highest possible monthly income for his investment amount.
• Guaranteed lifetime payments that won’t change with market performance.
• No need to manage investments or track market fluctuations.
• Freedom to use his income while he’s active in retirement.

I wanted the most income I could get now to enjoy my retirement to the fullest. – Ted

Bottom Line: Ted’s estimated monthly income from his annuity is about $4,269, guaranteed for life. While it won’t leave money to beneficiaries, the higher monthly income gives Ted financial stability and the ability to fully enjoy his retirement years.

Meet Ella — Planning for a Long Retirement

Ella invests $500,000 in an immediate lifetime annuity, which pays her $3,103 a month — about $37,236 a year — for the rest of her life. Her monthly payment is over $1,000 less than Ted’s, even though they invested the same amount.

Why Her Payout Is Lower

Annuity payouts are partly based on life expectancy. Because Ella is 10 years younger than Ted, the insurance company expects to make payments to her for a longer period of time, which lowers the monthly amount. Gender is another factor — women generally live longer than men, which can also reduce monthly payouts. For example, a 65-year-old man might receive slightly more each month for the same investment.

Why This Works for Ella:

• Guaranteed monthly income for life.
• Provides stability and predictability in retirement planning.
• Protects against the risk of outliving her savings.
• No need to manage investments or watch the market.

I want to make sure I have a steady income for as long as I live — no matter how long that is – Ella

Bottom Line: Ella’s estimated monthly income from her annuity is about $3,103 — guaranteed for life. While her monthly payout is lower than Ted’s, it provides lifelong security and peace of mind for her retirement years.

Meet Irene — Combining Lifetime Income With Legacy Protection

Irene invests $500,000 in an immediate lifetime annuity that pays her $2,827 a month — about $33,456 a year — for life. She adds a 20-year period certain, ensuring her beneficiary will continue to receive payments if she dies within the first two decades of the contract.

Why Her Payout Is Lower

While Irene is the same age and gender as Ella, her monthly payment is smaller because of the period certain rider. This feature represents an additional risk for the insurer, as it guarantees a set number of years of payments regardless of how long Irene lives. To offset that risk, the insurance company reduces the monthly payout.

Why This Works for Irene:

• Guaranteed lifetime income she can’t outlive.
• Peace of mind knowing her beneficiary will receive payments if she passes away within 20 years.
• Predictable, fixed monthly payments that aren’t affected by market changes.
• A balance between income for herself and security for her loved ones.

I want to enjoy my retirement knowing my needs are covered — and my family will still be taken care of if I’m not here. – Irene

Bottom Line: Irene’s estimated monthly income is about $2,827 — guaranteed for life, with at least 20 years of payments assured. While her monthly amount is lower than a life-only annuity, the added security for her beneficiary makes it the right choice for her priorities.

Today’s Best Fixed Annuity Rates by Term

Term	Rate	Provider	Product	AM Best Rating
1 Year	6.74%	Corebridge Financial	American Pathway Fixed 7 Annuity	A
2 Years	5.50%	Axonic Insurance Services	Skyline MYGA	A-
3 Years	6.10%	Wichita National Life Insurance	Security 3 MYGA	B+
4 Years	5.30%	Americo Financial Life and Annuity Insurance Company	Platinum Assure	A
5 Years	6.45%	Atlantic Coast Life	Safe Harbor Bonus Guarantee	B+
6 Years	6.67%	Atlantic Coast Life	Safe Harbor Bonus Guarantee	B+
7 Years	6.90%	Atlantic Coast Life	Safe Harbor Bonus Guarantee	B+
8 Years	5.65%	EquiTrust Life Insurance Company	Certainty Select	B++
9 Years	5.35%	Clear Spring Life and Annuity Company	Preserve Multi-Year Guaranteed Annuity	A-
10 Years	7.65%	Atlantic Coast Life	Safe Harbor Bonus Guarantee	B+

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Factors Impacting How Much a $500,000 Annuity Pays Per Month

Annuity providers calculate payouts differently for every annuity contract. An annuity with a $500,000 premium can have widely varying monthly payments depending on several factors.

• Annuitant’s age: Life expectancy factors into annuity payout calculations because the more years you live after you start receiving payments, the more payments you’ll receive. This means younger people tend to have lower payouts.
• Annuitant’s gender: On a similar note, women tend to have a higher life expectancy than men, so a woman’s annuity payout will be lower than a man of the same age.
• Payout period: You can choose an annuity that pays out for a certain number of years, for life, or even your and your spouse’s lives. The longer you’re expected to receive payments, the smaller the payment amount will be. A $500,000 straight life annuity will have a higher payout than a life with period certain or a joint and survivor annuity of the same premium amount. 
• Type of annuity: Immediate annuities are the easiest payments to calculate because they begin paying out right away. If you purchase a $500,000 deferred annuity with an interest rate, the value the annuity accumulates before it converts to income will factor into how much you’ll receive when the contract pays out.
• Riders: Annuity owners can customize their contracts with riders and provisions, like a death benefit or return of premium rider. However, these add-ons often come at a cost and can result in a lower monthly payment.

Income annuities are popular for providing predictable retirement income. Payment calculations depend on factors like gender, age, time frame, and the product vehicle. For example, a $500K annuity provides $2,997 per month to a 65-year-old woman. Older individuals and married couples receive more or less based on life expectancy and shared income. Annuities offer a safe way to secure predictable income in retirement.

Aamir M. Chalisa, MBA, LUTCF, MDRTGeneral Manager at Futurity First Insurance Group

Aamir M. Chalisa is the GM at Futurity First, leading Oak Brook’s top branch. With 30+ years’ expertise, chairs GAMA Global, driving diversity worldwide.