How much a $100,000 annuity pays per month depends on several factors, including the type of annuity, the age at which payments begin and whether payments are guaranteed for life or a set period. For example, a $100,000 immediate annuity purchased at age 65 might pay around $500 to $700 per month for life. Rates vary by provider, interest rates and optional features like survivor benefits or inflation protection.
Are you thinking about purchasing an annuity as part of your retirement plan? Connect with a financial advisor first. Finding one is easy with SmartAsset’s free matching tool.
What Is an Annuity?
An annuity is a financial product sold by insurance companies that provides a stream of income in exchange for an upfront payment or series of payments. It’s often used as a way to generate predictable income during retirement. There are two main phases: the accumulation phase, when the annuity is funded, and the payout phase, when the insurer begins issuing regular payments.
Annuities can be immediate or deferred. Immediate annuities begin payments shortly after the contract is funded, while deferred annuities grow tax-deferred until the payout phase begins later. They can also be fixed, offering guaranteed payments or variable, with payments tied to investment performance.
The payout structure can be customized based on preferences, such as lifetime income, joint income with a spouse, or payments over a set number of years. Because annuities are issued by insurance companies, they often include optional features like death benefits or inflation adjustments for an added cost.
It’s possible to calculate the value of an annuity on your own or you can use an online calculator from an annuity provider.
How Much Does a $100,000 Annuity Pay Per Month?
According to Schwab’s Income Annuity Estimator, a $100,000 immediate annuity in March 2025 could provide monthly payments ranging from around $542 to $1,031, depending on the annuitant’s age, gender, and the payout option chosen.
For a 65-year-old male, monthly payments could reach $637 under a single life only contract, while a 65-year-old female might receive $614. Adding guarantees — such as a 10- or 20-year certain period or a cash refund—lowers the monthly payout but provides added security to heirs.
Monthly Payments for a Male Annuitant
| Age | Single Life Only | Single Life with 10-Year Certain | Single Life with 20-Year Certain | Single Life with Cash Refund |
|---|---|---|---|---|
| 60 | $585 | $572 | $547 | $572 |
| 65 | $637 | $631 | $576 | $609 |
| 70 | $708 | $702 | $607 | $674 |
| 75 | $834 | $792 | $626 | $763 |
| 80 | $1,031 | $888 | $633 | $882 |
Monthly Payments for a Female Annuitant
| Age | Single Life Only | Single Life With 10 Year Certain | Single Life With 20 Year Certain | Single Life With Cash Refund |
|---|---|---|---|---|
| 60 | $571 | $558 | $542 | $544 |
| 65 | $614 | $602 | $567 | $585 |
| 70 | $675 | $663 | $594 | $642 |
| 75 | $779 | $743 | $618 | $717 |
| 80 | $949 | $835 | $630 | $814 |
Here’s a brief explanation of each of the payout options:
- Single Life Only: Pays as long as the annuitant is alive; stops at death.
- Single Life with 10-Year Certain: Pays for life, but guarantees at least 10 years of payments to a beneficiary if the annuitant dies early.
- Single Life with 20-Year Certain: Same as above, but with a 20-year guaranteed period.
- Single Life with Cash Refund: Pays for life; if the annuitant dies before receiving the full purchase amount, the remainder is refunded to a beneficiary.
How to Calculate Payments on a $100,000 Annuity
When you buy an immediate annuity, the insurance company calculates how much to pay you each month based on how long you’re expected to live and the return they expect to earn on your money. The goal is to spread your $100,000 investment over your projected lifetime while factoring in investment earnings.
A simplified version of the formula used to calculate a fixed immediate annuity looks like this:
Monthly Payment = P × (r ÷ (1 − (1 + r)−n))
Where:
- P = principal (the amount invested)
- r = monthly interest rate (annual rate divided by 12)
- n = number of months payments will be made
For example, using a 4% interest rate and an 18.5-year expected payout period, a $100,000 immediate annuity would pay about $637 per month. This simplified calculation closely aligns with real-world estimates for a 65-year-old male purchasing a life-only annuity.
Other methods may incorporate more complex actuarial models, inflation adjustments or varying payout structures. The actual payout depends on the insurer’s pricing assumptions and the features selected.
Bottom Line
What a $100,000 annuity pays per month can vary widely depending on how the contract is structured and who’s buying it. A younger buyer or one selecting added guarantees may see lower monthly payouts, while older individuals choosing life-only options can expect higher income. The same investment can produce very different results depending on the features built into the annuity and the assumptions used by the insurer.
Tips for Retirement
- A financial advisor can help you decide whether an annuity is something you should consider. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Would you like to determine how much you need to save for retirement? Use SmartAsset’s retirement calculator to help you calculate your retirement needs.
- Social Security likely won’t fund your entire retirement, but it can be a key part of making sure you have enough money to live on after your working days are done. Use SmartAsset’s free calculator to see how much you could get in Social Security payments once you are ready to retire.
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