Annuity Payout Calculator (2025)
Calculate how much monthly income your annuity will pay — or how much you need to invest for a target monthly amount. Uses 2025 market rates.
How much monthly income will my annuity pay?
2025 Annuity Payout Rate Table — Life Only (Single Life)
| Premium | Age 60 | Age 65 | Age 70 | Age 75 | Age 80 |
|---|---|---|---|---|---|
| $50,000 | $275/mo | $310/mo | $370/mo | $460/mo | $590/mo |
| $100,000 | $550/mo | $620/mo | $740/mo | $920/mo | $1,180/mo |
| $250,000 | $1,375/mo | $1,550/mo | $1,850/mo | $2,300/mo | $2,950/mo |
| $500,000 | $2,750/mo | $3,100/mo | $3,700/mo | $4,600/mo | $5,900/mo |
| $1,000,000 | $5,500/mo | $6,200/mo | $7,400/mo | $9,200/mo | $11,800/mo |
Life-only immediate annuity (SPIA), single life, no COLA. 2025 market estimates — actual carrier quotes vary.
Payout Type Comparison — $250,000 Premium, Age 65
| Payout Type | Est. Monthly | Heirs Receive | Longevity Risk |
|---|---|---|---|
| Life only | $1,550/mo | Nothing if you die early | Fully protected |
| Life + 20-yr certain | $1,380/mo | Remaining payments (up to 20 yrs) | Fully protected |
| Joint life (both spouses) | $1,215/mo | Continues to survivor | Both protected |
| 10-year certain only | $2,220/mo | Remaining payments | Not protected after 10 yrs |
| 20-year certain only | $1,400/mo | Remaining payments | Not protected after 20 yrs |
Approximate 2025 estimates. Period-certain-only annuities stop after the fixed term regardless of survival.
Understanding Annuity Payouts: Complete 2025 Guide
What Is an Annuity Payout Rate?
An annuity payout rate (also called the payout factor) is the percentage of your premium returned to you each month. A $100,000 annuity paying $620/month has a payout rate of 0.62% per month or 7.44% per year. This rate is set at purchase and depends on your age, gender (where legally permitted), interest rates, and payout options chosen.
In 2025, annuity payout rates are near 20-year highs because they are closely tied to 10-year Treasury yields. When the Federal Reserve raised rates aggressively in 2022–2023, annuity payouts rose significantly. Someone who bought an annuity in 2021 (when rates were near zero) receives substantially less per month than someone purchasing the same annuity today.
Immediate Annuities (SPIAs) — Highest Guaranteed Income
Single Premium Immediate Annuities (SPIAs) start paying within 30 days of purchase and offer the highest guaranteed monthly income. There is no accumulation phase — your lump sum goes directly to the insurance company, which calculates your monthly payment using actuarial tables and current interest rates.
Life-only SPIAs pay the highest amount per month but cease at death. If you die after only 2 years, the insurance company keeps the remaining principal. This makes them unsuitable for people with dependents or significant health concerns. However, for someone in good health who wants to maximize lifetime income and has other assets for heirs, life-only SPIAs are the optimal choice.
Fixed Annuities — Accumulation + Income
Fixed annuities credit a guaranteed interest rate (typically 4.5–5.5% in 2025) during an accumulation phase of 3–10 years, then can be annuitized or surrendered. They offer more flexibility than SPIAs: you can take systematic withdrawals, annuitize on a future date, or surrender (with potential penalties) if plans change.
Fixed Index Annuities (FIAs) — Market-Linked Growth
FIAs link growth to a market index (most commonly the S&P 500) with a 0% floor — you cannot lose principal due to market downturns. Participation rates (50–100% of index gains) and caps (typically 8–12%/year) limit upside. Many FIAs offer optional Guaranteed Minimum Withdrawal Benefit (GMWB) riders for an additional annual fee (0.5–1.5% of account value).
Structured Settlement Annuities — Tax-Free Injury Payments
Structured settlements arise from personal injury, workers' compensation, or wrongful death lawsuits. Payments are completely tax-free under Internal Revenue Code Section 104. If you received a structured settlement and are considering selling future payments, use our Structured Settlement Calculator to evaluate present value versus the lump sum offered.
How Interest Rates Affect Annuity Payouts
Annuity payouts move in the same direction as interest rates. When the 10-year Treasury yield rises by 1 percentage point, annuity payouts typically increase by approximately 5–7%. Purchasing an annuity when rates are high (as in 2024–2025) vs. when rates are low (2020–2021) can mean a difference of 15–25% in monthly income on the same premium.
Tax Treatment of Annuity Payouts
Qualified annuities (funded with pre-tax IRA, 401(k), or 403(b) money) are fully taxable as ordinary income when distributed. Non-qualified annuities (purchased with after-tax money) use the exclusion ratio — only the earnings portion is taxable, not the return of your original premium.
Shopping for the Best Annuity Payout Rate
Annuity rates vary significantly between insurance companies — sometimes by 5–15% on the same premium and age. Always get quotes from at least 3–5 highly-rated insurers (A.M. Best rating of A or better), use an independent annuity comparison service, and understand surrender charges if purchasing a deferred annuity.
Frequently Asked Questions
How much does a $100,000 annuity pay per month?
A $100,000 immediate annuity pays approximately $480–$620 per month for a 65-year-old (life only, 2025 rates). With a 20-year period certain, the same $100,000 pays $530–$580/month. At age 70 the payout rises to $570–$740/month. Rates vary by insurance company, state, and market interest rates.
What is the annuity payout rate for 2025?
2025 immediate annuity payout rates for a $100,000 premium (life-only): Age 60 = $450–$510/month, Age 65 = $500–$580/month, Age 70 = $580–$680/month, Age 75 = $700–$820/month. These rates are historically high due to elevated interest rates in 2023–2025.
What type of annuity pays the most monthly income?
Immediate income annuities (SPIAs) with a life-only payout typically pay the most per month. Variable annuities with GMWB riders offer more flexibility but lower guaranteed payouts. Fixed index annuities offer upside potential with a principal floor.
Are annuity payouts taxable?
Qualified annuities (pre-tax IRA/401k funds) are fully taxable as ordinary income. Non-qualified annuities (after-tax money) use the exclusion ratio — only the earnings portion is taxable, not the return of premium. Inherited annuities follow different rules depending on your relationship to the deceased.
How does a structured settlement annuity differ from a regular annuity?
Structured settlement annuities arise from personal injury settlements — payments are tax-free under IRC Section 104. Regular commercial annuities are purchased voluntarily and have taxable earnings. Structured settlement recipients can sell future payments to factoring companies for a lump sum (at a significant discount), governed by the Structured Settlement Protection Act.