Key Takeaways
- A $200,000 annuity could pay $1,199 a month or $14,383 a year for a 65-year-old woman purchasing an immediate single life annuity.
- Annuity providers calculate the monthly payout of a $200,000 annuity based on factors such as the annuitant’s life expectancy, the type of annuity and how long payments are guaranteed for.
- The younger you are when you start receiving annuity income, the lower your payments will be. On average, women live longer than men, granting them lower payouts.
The following estimates are for an immediate $200,000 annuity with lifetime payments.
The payouts listed for a joint annuity with a male and female spouse assume that both spouses are the same age and that payments remain level if either spouse is alive.
Annuity.org calculated the expected monthly payments using data from Cannex, an independent company that provides access to a database of updated annuity products.
Monthly Payouts for $200,000 Immediate Lifetime Annuity
| Age | Male | Female | Joint Life |
| 60 | $1,143 | $1,101 | $1,010 |
| 65 | $1,258 | $1,199 | $1,083 |
| 70 | $1,421 | $1,339 | $1,185 |
| 75 | $1,667 | $1,546 | $1,330 |
| 80 | $2,048 | $1,878 | $1,562 |
Annual Percentage* Payouts for $200,000 Immediate Lifetime Annuity
| Age | Male | Female | Joint Life |
| 60 | 6.86% | 6.60% | 6.06% |
| 65 | 7.55% | 7.19% | 6.50% |
| 70 | 8.53% | 8.03% | 7.11% |
| 75 | 10.00% | 9.28% | 7.98% |
| 80 | 12.29% | 11.27% | 9.37% |
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Case Studies
To understand how payouts for a $200,000 annuity can vary, consider the following
case studies. These scenarios can give you a general idea of how different factors might influence the payout of annuities with the same premium amount.
As with the tables, we calculated these payout estimates using Cannex data.
Scenario 1 – Tony
Name: Tony
Age: 70
Looking to Invest: $200,000
- Tony wants to protect against outliving his savings.
- He purchases a $200,000 immediate lifetime annuity.
Monthly payout: $1,421
Tony is a retiree who has concerns about running out of money in retirement. To hedge against this risk, he purchases an immediate annuity with a guaranteed lifetime payout.
The $200,000 immediate annuity generates monthly payments of $1,421 a month, or $17,052 a year. This calculation assumes that Tony’s annuity is a single-life annuity with no death benefit, so if Tony passes away before receiving the full return of his premium, the insurance company keeps the remainder.
Scenario 2 – Trudy
Name: Trudy
Age: 65
Looking to Invest: $200,000
- Trudy wants to create an income stream for herself in retirement.
- She purchases a $200,000 immediate lifetime annuity.
Monthly payout: $1,199
Trudy retires and wants to keep receiving regular income after she stops working. She purchases the same type of annuity as Tony, but her payments are significantly lower. In this scenario, the $200,000 immediate annuity generates $1,199 in monthly payments or $14,383 in yearly income.
Trudy receives lower payments than Tony for the same premium and type of annuity because she has a longer life expectancy. Annuity companies use life expectancy to determine payouts for lifetime annuities, and the longer the company expects to have to pay the annuitant, the lower the payments will be.
Trudy is younger than Tony, and women tend to live longer than men, so her life expectancy is higher and her monthly payouts are lower. For a 65-year-old man, a $200,000 immediate lifetime annuity would pay $1,258 a month, or $15,091 a year.
Names: Helen and Phil
Ages: 65 and 65
Looking to invest: $200,000
- Helen and Phil both seek guaranteed lifetime income.
- They purchase a $200,000 immediate annuity with a joint life payout.
Monthly payout: $1,083
Helen and Phil purchase a joint and survivor annuity, which guarantees payments as long as either Helen or Phil is alive. This $200,000 immediate annuity produces $1,083 a month, or $12,994 a year.
Because joint and survivor annuities cover two annuitant’s lifetimes, they represent a greater obligation to the annuity issuer. Companies compensate for this risk by lowering the monthly payouts for joint life annuities compared to single life products.
My clients purchase annuities with income riders for predictable retirement income. These riders allow them to calculate and guarantee their income at the time of purchase, eliminating the risk of market fluctuations. For a recent client with $200K to invest, I ran models and determined that based on his age and investment horizon, he could receive $18K per year for life. He appreciated the certainty of this income, which will also supplement his Social Security and help him meet his financial goals. Plus, he can access a lump sum in future years if needed.
Aamir Chalisa, MBA, LUTCF, MDRT
Factors Impacting How Much a $200,000 Annuity Pays per Month
As the scenarios above illustrate, many factors can impact the payout of an annuity.
Annuity Payout Factors
- Annuitant’s life expectancy: To figure out how much to pay out each month, annuity issuers must determine how much longer the annuitant is likely to live. The longer you are expected to live, the lower your payout will be, so younger people and women receive lower payments.
- Type of annuity: Immediate annuities are the most straightforward type of annuity, so their payouts are the easiest to estimate. Other types of annuities, such as fixed annuities, fixed index annuities or variable annuities, are more complex. These annuities accumulate value before converting to income, so their payouts are more difficult to predict.
- Payout period: When you purchase an annuity, you can choose how long you want guaranteed payments. A single life annuity will have higher monthly payments than a joint life annuity or a life with period certain annuity.
- Riders: Annuity owners can customize their contracts with riders for an additional cost. Some riders, such as a cost of living adjustment rider or a return of premium rider, may lower payout amounts because they put more risk onto the annuity issuer.
The premium amount used to purchase the annuity generally has the most influence on the payout. The annuitant’s life expectancy as well as the features of the annuity itself also factor into payout calculations.
Editor Norah Layne contributed to this article.
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