Annuity Payout Calculator
Estimate your monthly retirement income from a fixed, variable, or indexed annuity.
Investment Details
Payout Options
Monthly Payout
$2,102
$1,884 after tax
Account Value at Payout
$289,009
after 10 years growth
Break-Even Age
73
total payouts exceed investment
Annual Payout
$25,224
Total Payouts
$378,360
Tax Per Month
$218
Real Value (Today's $)
$1,642/mo
Payout Schedule
| Year | Age | Annual Payout | Cumulative | Real Value |
|---|---|---|---|---|
| 1 | 65 | $25,224 | $25,224 | $19,705 |
| 2 | 66 | $25,224 | $50,448 | $19,224 |
| 3 | 67 | $25,224 | $75,672 | $18,755 |
| 4 | 68 | $25,224 | $100,896 | $18,298 |
| 5 | 69 | $25,224 | $126,120 | $17,852 |
| 10 | 74 | $25,224 | $252,240 | $15,778 |
| 15 | 79 | $25,224 | $378,360 | $13,946 |
Key Insights
- 10 years of tax-deferred growth turns your $200K into $289K before payouts begin.
Estimates only. Actual annuity payouts depend on the insurer, contract terms, and market conditions (variable/indexed). Consult a financial advisor before purchasing.
How Annuity Payouts Work
An annuity is a contract with an insurance company: you pay a lump sum (or series of payments), and in return, you receive guaranteed income — either immediately or starting at a future date. The payout amount depends on your investment size, the interest rate, your age at annuitization, and the payout option you choose. Life annuities pay until death, while period-certain annuities pay for a fixed number of years regardless of how long you live.
Annuity Types Compared
| Type | Return | Risk | Typical Fees | Best For |
|---|---|---|---|---|
| Fixed | 3–5% guaranteed | Low | 0–0.5% | Conservative retirees wanting predictable income |
| Variable | 4–8% (not guaranteed) | Medium-High | 2–3% | Growth-oriented investors comfortable with market risk |
| Fixed Indexed | 3–7% (capped) | Low-Medium | 1–2% | Those wanting some market upside with downside protection |
| Immediate | Based on rates at purchase | Low | Built into payout | Those needing income right away |
| Deferred | Grows tax-deferred | Varies | Varies | Those with 5+ years before needing income |
Monthly Payout by Investment Amount
Based on a 65-year-old with a fixed annuity at 5% rate, lifetime payout, 1.25% fees:
| Investment | Monthly Payout | Annual Income | Break-Even Age |
|---|---|---|---|
| $100,000 | $580 | $6,960 | 79 |
| $200,000 | $1,160 | $13,920 | 79 |
| $300,000 | $1,740 | $20,880 | 79 |
| $500,000 | $2,900 | $34,800 | 79 |
| $1,000,000 | $5,800 | $69,600 | 79 |
Annuity Fees — What to Watch For
Annuity fees can dramatically reduce your returns. Fixed annuities typically have the lowest fees (0–0.5%), while variable annuities can charge 2–3% or more annually through mortality and expense charges, fund management fees, and rider costs. A 1% difference in fees on a $200,000 annuity over 20 years costs you roughly $40,000 in lost growth. Always ask for the total expense ratio before signing.
Surrender charges are another hidden cost — if you withdraw early (typically within 5–10 years), you'll pay 5–8% of the withdrawal amount. Most annuities allow 10% penalty-free withdrawals annually.
Frequently Asked Questions
How are annuity payouts taxed?
If you bought the annuity with after-tax dollars, only the earnings portion of each payout is taxed as ordinary income. The IRS uses an "exclusion ratio" to determine how much of each payment is return of principal (tax-free) versus earnings (taxable). If purchased with pre-tax money (like from a 401(k) rollover), the entire payout is taxable as ordinary income.
What happens to my annuity if I die early?
With a life-only annuity, payments stop at death — the insurance company keeps the remaining balance. To protect heirs, choose a "life with period certain" option (guarantees payments for at least 10–20 years) or a joint-and-survivor annuity that continues payments to your spouse. These options reduce your monthly payout by 10–25% compared to life-only.
Should I buy an annuity or invest on my own?
Annuities make sense if you want guaranteed income you can't outlive and you're willing to accept lower returns for that certainty. Self-managing investments typically yields higher returns but carries sequence-of-returns risk in retirement. Many advisors recommend annuitizing only a portion of your portfolio — enough to cover essential expenses — and investing the rest for growth.
See also: Retirement Income Calculator and Social Security Break-Even Calculator.