How Much Does a $400,000 Annuity Pay per Month?

Annuity.org sourced the latest payout data from Cannex to provide accurate, current figures for a $400,000 income annuity. All estimates are for lifetime income annuities but may include different ages or guaranteed payout options to show different scenarios that might be common to the variety of retirees who search for annuity products. To research current payouts based on your specific needs, please visit our income annuity calculator. 

Understanding Monthly and Annual Payouts for a $400,000 Guaranteed Lifetime Annuity

When planning for retirement, a guaranteed lifetime annuity can provide financial security and peace of mind. This type of annuity ensures that you receive regular payments for the rest of your life, regardless of how long you live. The tables below illustrate the monthly and annual percentage payouts for a $400,000 guaranteed lifetime annuity based on various ages and life scenarios. Understanding these payouts can help you make informed decisions about your retirement strategy, ensuring that you can meet your financial needs throughout your golden years.

Monthly Payouts for $400,000 Guaranteed Lifetime Annuity

Age	Male	Female	Joint Life
60	$2,287	$2,196	$2,010
65	$2,516	$2,393	$2,156
70	$2,838	$2,674	$2,364
75	$3,315	$3,088	$2,659
80	$4,084	$3,744	$3,115

Annual Percentage* Payouts for $400,000 Guaranteed Lifetime Annuity

Age	Male	Female	Joint Life
60	6.86%	6.59%	6.03%
65	7.55%	7.18%	6.47%
70	8.51%	8.02%	7.09%
75	9.95%	9.26%	7.98%
80	12.25%	11.23%	9.35%

Case Studies

Understanding how annuities play a role within a financial plan can be more illustrative than a simple quote. Investors face various challenges as they prepare for retirement. Below are three scenarios that demonstrate how income annuities can fill an income need while minimizing the risk of outliving that income. 

Annuity payout estimates were generated using data from Cannex and our income annuity calculator. 

Scenario 1

Payout Option	Life with 20 year certain
Monthly Income	$3,654
Payout Percentage	10.96%
Minimum Payout	$876,960

Diego wants to lock in a guaranteed rate of return and lifetime income payout for when he retires in 10 years at age 65. Choosing a deferred income annuity allows him to predict what his expected income will be in the future. 

Based on Diego’s life expectancy, he can select a 20 year payment guarantee for only slightly less than the life-only payout. This allows him to receive reliable income without the concern that his heirs might miss out on the proceeds of the annuity if he were to pass away prematurely. The total amount he or his heirs will receive from this annuity is $876,960 or more depending on how long he lives. 

Scenario 2

Payout Option	10 year period certain only
Monthly Income	$4,077
Payout Percentage	12.23%
Minimum Payout	$489,260

Carol would like to maximize her income over the next 10 years in order to travel and spend time with her family. Carol expects that her life expectancy will not exceed 10 years time due to declining health. She has ample life insurance which she plans to maintain to create a legacy for her family. 

By selecting a 10 year period certain annuity, her heirs will receive more than her principal contribution over the next 10 years. Her annuity will provide her automated income that will not require any management so she can focus on her retirement priorities. 

Scenario 3

Payout Option	Joint Life with 10 year certain
Monthly Income	$4,941
Payout Percentage	14.82%
Minimum Payout	$592,920

Robert and Leslie are creating an income stream that will kick in at age 80 to help support them in their old age as well as offset the rising cost of living that they expect to incur in the future. Because they aren’t sure they will be alive to receive some or all of the payments, they select a 10 year payment guarantee to ensure that their daughter Amy can utilize the assets if they do not. 

This joint life annuity will protect both Robert and Leslie equally. Even if one of them passes away, the other will still receive the full monthly payment for as long as they live. If both pass away before 10 years of payments have been made, then Amy will receive the remainder of the 10 year guarantee. 

Factors Impacting How Much a $400,000 Annuity Pays per Month

The payouts offered by annuity companies will be calculated based on several factors in each individual annuity contract. The individual quote you receive on your $400,000 income annuity may differ based on one or all of the following information. It is important to explore many products from various companies to find the type of contract that will meet your needs. 

• Owner’s Age: The older the owner of the annuity contract is, the greater the payment will be. Life expectancy is one of the most important factors in determining an annuity’s payout. 
• Owner’s Gender: Women have, on average, a longer life expectancy than men. Therefore, their payouts are smaller than those for men of a similar age.
• Type of Annuity: An immediate income annuity will have a smaller payout compared to a deferred income annuity, which will begin payouts later. 
• Expected Payout Period: An older individual will have a shorter payout period (life expectancy) than a younger person. Guaranteed payout periods, such as a 10-year period certain will translate into a lower payment than a life-only income annuity. Similarly, a joint annuity will be expected to have a longer payout period than a single-life annuity. 
• Optional Riders: Riders such as return of premium, period certain or a guaranteed death benefit will reduce the payout amount compared to a life-only annuity.
• Market Environment: The prevailing interest rate environment can impact payout rates for annuities. Lower interest rates, especially over a long period of time, mean insurance companies expect to earn less on their investments. Therefore, insurers must pay less relative to periods of time with higher interest rates.