Annuity Calculator

How This Annuity Calculator Works

An annuity turns a lump sum into a stream of income you can't outlive — at least, that's the pitch. This calculator shows you the mechanics behind that promise: plug in the amount you'd put in, the interest rate the contract credits, and how long payouts should last, and it estimates the regular payment you'd receive. We use standard present-value-of-an-annuity math, the same formula a financial advisor runs on the back of a napkin, so you can see whether the income the agent quoted you actually adds up.

One honest caveat: annuities are among the most over-complicated products in personal finance. The number here is a clean, fees-aside baseline. Real contracts layer in surrender charges, mortality and expense charges, and riders that can move the payment 10% or more in either direction. Use this as a sanity check, then read the actual contract illustration before committing. To see how annuity income fits your bigger retirement picture, pair it with the retirement needs calculator.

The Main Types of Annuities

Not all annuities behave the same, and the type changes the payout dramatically.

Immediate vs. deferred

An immediate annuity (often called a single-premium immediate annuity, or SPIA) starts paying within a year of purchase — you hand over a lump sum, checks start arriving. A deferred annuity waits months or years before payouts begin, which lets the balance grow tax-deferred in the meantime and usually produces a larger eventual payment.

Fixed, variable, and indexed

A fixed annuity credits a set rate, so payments are predictable. A variable annuity ties returns to investment subaccounts, so income rises and falls with the market. An indexed annuity tracks a market index (often the S&P 500) with a floor and a cap — less downside than variable, less upside than direct investing, and notoriously complex to compare.

What Affects Your Annuity Payout

• Age and life expectancy: Older buyers get larger monthly payouts because the insurer expects to pay for fewer years. This is why waiting to annuitize often raises income.
• Interest rate environment: Payouts rise when insurers can reinvest premiums at higher rates. The rate you input here is a stand-in for that environment.
• Payout period: A "life-only" payout is the highest monthly check but stops at death; "period certain" (e.g., 20 years guaranteed) pays less per month but protects heirs.
• Single vs. joint life: Adding a spouse as a joint annuitant lowers the payment because the insurer may pay until the second spouse dies.
• Fees and riders: Living-benefit riders, death benefits, and surrender periods all chip away at the payout.

Average Annuity Payouts in 2026

For context, a $100,000 single-life immediate annuity for a 65-year-old in early 2026 typically pays roughly:

• Age 60: about $450-$520/month ($5,400-$6,240/year)
• Age 65: about $520-$600/month ($6,240-$7,200/year)
• Age 70: about $600-$700/month ($7,200-$8,400/year)
• Age 75: about $700-$820/month ($8,400-$9,840/year)

These move with interest rates and carrier pricing, so treat them as a range, not a guarantee. A joint-life payout for a couple runs noticeably lower than the single-life figures above.

Is an Annuity Right for You?

Annuities shine when you're worried about outliving your money and want a floor of guaranteed income — they pair well with, but don't replace, Social Security. They make less sense if you need liquidity, since surrender periods can lock your principal up for years. If you're weighing how much of your nest egg to annuitize versus keep invested, the retirement needs calculator helps size the gap, and the Medicare cost calculator helps you budget for the healthcare side of retirement.

Methodology & Data Sources

Payment estimates use the present value of an ordinary annuity formula, PV = PMT × [1 − (1 + r)^−n] / r, solved for PMT. Payout benchmarks reflect 2026 immediate-annuity quote ranges from major U.S. carriers and industry aggregators. Figures exclude rider fees, surrender charges, and state-specific taxes, and they are illustrative only — not a quote, an offer, or a guarantee of actual contract terms. Annuity contracts are complex; review the full contract illustration with a licensed advisor before purchasing.