Retirement tool · October 2026 annuity rates

Immediate Annuity Calculator: How Much Income Will Your Savings Buy?

See the monthly income an immediate annuity pays for life at your age, with joint, period-certain and cash-refund options, then check it against the 4% rule, your odds of coming out ahead, taxes and inflation. No name or email needed.

By Work & Money Editorial Team · Last reviewed October 18, 2026 · Calculation savings.annuity-spia v1.0.0

Your annuity

Amount to put in

The premium: savings, IRA or 401(k) money.

Your age now

Sex (insurers price by it)

Payout option

Guarantees cost some monthly income.

Spouse's age

Spouse's sex

Monthly payment you were quoted (optional)

Optional: check an insurer's quote. Blank = our estimate.

Yearly increase (optional)

0 = level payments; increasing ones start lower.

Taxes and comparisons

Money comes from

After-tax money gets a tax-free share (exclusion ratio).

Filing status

Other taxable income a year (optional)

Pensions, taxable Social Security, interest: for your tax bracket.

Return you'd expect investing it yourself (optional)

After fees, per year.

Inflation (optional)

Your life expectancy

For the return and odds below; the payout estimate always uses insurers' pricing.

Lifetime income

$668.39 a month

before tax, for as long as you live

Estimate · October 2026 quotes

Payout: 8.02% of the premium a year ($8,021), life only — our estimate
Quote check: $668.39 a month at 5.75% pricing; real quotes vary
Return it pays you (on average): 4.76%
Return if you live to…: 85: 5.28% · 90: 6.58% · 95: 7.28% · 100: 7.68%
Payback age: Age 78 (81% chance you're alive then)
4% rule instead: $333.33 a month in the first year (4% of the premium)
Same income, invested yourself: Withdrawing $668.39 a month at 5%: runs out at 84 (59% chance you outlive it)
Federal tax: All taxable (IRA/401(k) money): about $831 federal tax in year one; $599.10 a month after federal tax
After inflation: $522 after 10 years, $408 after 20 (today's dollars, 2.5% inflation)

The payment is our estimate, priced like a typical October 2026 quote. Actual quotes differ by insurer, state and week, often by 5–10%: get several quotes and enter the best one to check it.
Weighted by the odds you're alive for each payment, the annuity pays the equivalent of 4.76% a year (with pensioners' life expectancy). Compare it with what safe investments, such as Treasury bonds held to maturity, pay today: those can run out if you live long; the annuity can't.
Bought inside an IRA or 401(k), payments are fully taxable and count toward your required minimum distributions. Before 59½, lifetime payments from an IRA annuity avoid the 10% early-withdrawal tax; from a 401(k) or other employer plan, only after you've left that employer.
Payments are level: at 2.5% inflation, the first payment buys about $408 worth after 20 years. An increasing annuity starts lower.
Life only pays the most each month but nothing to heirs: a period-certain or cash-refund option costs some monthly income and protects against dying early.
State guaranty associations protect annuity owners if an insurer fails, typically up to $250,000 of present value per person per insurer; check your state's limit and the insurer's rating.

How this was calculated

Payout estimate. We price the annuity the way an insurer does: the monthly payment whose expected cost, payment by payment, weighted by the chance you're alive (and, for joint options, your spouse) and discounted at a pricing rate, equals your premium. The first payment comes a month after you buy. Our pricing basis (5.75% and the IRS 2027 pension-plan mortality tables with death rates × 0.64) is fitted to the life-only quotes ImmediateAnnuities.com surveyed on October 2, 2026 (the midpoint of the best and average quote at ages 60–80, men and women; within about 2.5% at every age, rates by age). Period-certain options pay until the guarantee ends even if you die; cash refund pays your beneficiary whatever of the premium hasn't come back yet; joint options pay while either of you is alive (50%: half after your death). Real quotes vary by insurer, state and week, so enter a quote to check it.

Return it pays you is the rate at which the expected payments, weighted by survival on the table you choose, are worth the premium (and if you live exactly to 85, 90, 95 or 100; for joint options, both of you). By default survival comes from the IRS 2027 pension-plan tables (Notice 2026-27): pensioners live longer than average, and insurers price for longer lives still, partly to cover their costs, so on the insurers' own basis the return equals their pricing rate. Payback age: when the payments add up to the premium (not discounted). Invested yourself: the premium earns your return and you withdraw the annuity's payment each month; we show when it runs out. Tax: IRA and 401(k) money is fully taxable. After-tax money uses the exclusion ratio: premium ÷ expected return, where expected return = yearly payment × the IRS Table V multiple for your age (26 CFR 1.72-9; Pub. 939). Joint, period-certain and cash-refund annuities use other IRS tables (VI and VII), which we approximate and flag. Federal tax is the change in your 2026 tax from our tax bracket engine, with your other income and the 65+ amounts. State tax, and any extra Social Security that becomes taxable, aren't included.

Calculation savings.annuity-spia v1.0.0. Not financial advice; we don't sell annuities.

Quick answer: how much does a $100,000 annuity pay per month?

In October 2026, $100,000 buys a 65-year-old man about $668 a month for life and a 65-year-old woman about $644 (life only, our estimate); best quotes run higher, around $698 and $669 (ImmediateAnnuities.com, October 2). Income scales with the premium: $500,000 buys a 65-year-old man about $3,342 a month. The older you are when you buy, the more each month, because the insurer expects to pay for fewer years. Payouts also rise and fall with bond yields (Blanchett).

Annuity payout rates by age, October 2026

Monthly life-only income per $100,000 premium
Age	Man: our estimate	Man: best / average quote	Woman: our estimate	Woman: best / average quote
60	$614	$655 / $586	$596	$634 / $567
65	$668	$698 / $643	$644	$669 / $615
70	$745	$769 / $719	$712	$726 / $666
75	$859	$900 / $838	$812	$836 / $778
80	$1,032	$1,076 / $1,007	$958	$1,000 / $926

Quotes from ImmediateAnnuities.com, surveyed October 2, 2026. Other recent figures for a 65-year-old man: $698 (Blueprint Income, October 2026), $625 (Annuity.org via CBS News, September 2026) and $628 (Schwab, November 2025, via SmartAsset). Shopping matters: the best quote at 65 is about 9% above the average one.

Life only, period certain, cash refund or joint?

Monthly income per $100,000, man aged 65 (our estimate)
Option	Monthly income	What happens at death
Life only	$668	Payments stop.
Life with 10 years certain	$655	Payments continue to your beneficiary until 10 years from purchase.
Life with 20 years certain	$619	Payments continue to your beneficiary until 20 years from purchase.
Life with cash refund	$642	Your beneficiary gets any premium not yet paid out, in a lump sum.
Joint life, 100% to the survivor (both 65)	$585	Payments continue in full until the second death.
Joint life, 50% to your spouse (both 65)	$624	Your spouse gets half for life after your death.

Guarantees cost less than people expect at 65, because the odds of dying in the first 10 years are low; they cost more at 75 or 80.

Is an immediate annuity worth it? Payback age and odds

A 65-year-old man's $668 a month adds up to the $100,000 premium at age 78, and the odds that he lives past it are about 81% (IRS pension-plan table, Notice 2026-27). Weighted by those odds, the annuity pays the equivalent of about 4.76% a year: 5.28% if he dies at 85, 7.28% if he lives to 95. With whole-population life expectancy (SSA) it's 3.72%, and for someone as long-lived as insurers assume, 5.75%: annuities are a better deal the healthier you are. Compare those rates with what safe bonds pay today, remembering that what you're really buying is insurance against a long life: the payments never run out.

Annuity vs the 4% rule

The "4% rule" says you can withdraw 4% of savings in the first year and raise it with inflation: $333 a month from $100,000. The annuity pays $668 from the first month, about 8% a year, but it's level, ends at death and leaves nothing (life only). Withdrawing the annuity's $668 a month from $100,000 invested at 5% runs out at 84, and the odds that a 65-year-old man outlives the money are about 59% (IRS pension-plan table). The two aren't the same product, so compare the income and what's left over time, not just the rates (Blanchett). A middle path is to annuitize only enough to cover basic bills together with Social Security, and invest the rest. Our retirement savings calculator models the 4% side.

How annuity income is taxed: the exclusion ratio

IRA or 401(k) money (a qualified annuity): every payment is taxable as ordinary income, as an IRA withdrawal would be. Payments count toward your required minimum distributions (IRS).
After-tax savings (nonqualified): part of each payment is your own money coming back and isn't taxed. The excluded share is your investment ÷ expected return, where expected return = yearly payment × the IRS multiple for your age (Pub. 939; Table V: 20.0 at 65, 16.0 at 70, 12.5 at 75). For the 65-year-old man, 62.3% of each payment is tax-free until about age 85, when he has recovered his $100,000; then payments are fully taxable. If he dies first, the unrecovered amount is an itemized deduction on his final return (for a joint annuity, at the second death).
The 10% early-withdrawal tax doesn't apply to an immediate annuity bought with after-tax money (§72(q)), or to lifetime payments from an IRA, even before 59½; from a 401(k) or other employer plan, the lifetime-payment exception applies only after you've left that employer (§ 72(q) and (t)).
State tax varies: many states treat qualified annuity payments like IRA withdrawals. See retirement income tax by state.

Inflation and increasing payments

At 2.5% inflation, a level $668 buys about $408 worth after 20 years. An annuity that rises 2% a year starts lower, about $550 per $100,000 at 65 by our estimate, and its monthly payment overtakes the level one after roughly 10 years (total income received takes much longer to catch up). True inflation-linked (CPI) annuities are rare in the U.S.; Social Security is the main inflation-protected lifetime income.

Compare with a pension offer or Social Security

If your employer offers a pension or a lump sum, the market is a useful check: a 65-year-old man's $450,000 lump sum would buy about $3,008 a month from an insurer today, life only. A pension that pays more than an insurer would for the same money is worth a close look, though PBGC limits, cost-of-living raises and survivor terms matter too; our pension lump sum vs annuity calculator works out the rate your offer implies and checks it against the IRS minimum. Delaying Social Security works like buying more inflation-protected lifetime income, and often compares well with a commercial annuity: see our Social Security claiming calculator.

What if the insurer fails?

Annuities are backed by the insurer, not the FDIC. Every state has a guaranty association that continues payments if an insurer fails, typically up to $250,000 of present value per person per insurer, more in some states (NOLHGA). For larger amounts, splitting purchases among highly rated insurers keeps each one under the limit.

Common questions

How much does a $500,000 annuity pay per month?

About $3,342 a month for life for a 65-year-old man in October 2026 (our estimate, life only), $3,221 for a woman, and $2,924 for a couple both 65 with full survivor income.

When is the best age to buy an immediate annuity?

Payouts rise with age, because each payment includes a growing "mortality credit" (money from buyers who die earlier). Buying in stages spreads out interest-rate risk and lets later purchases lock in higher payout rates; deciding when to claim Social Security first makes it easier to size the annuity.

Can I get my money back?

Usually not: an immediate annuity is irrevocable. A cash-refund or period-certain option protects heirs; it doesn't let you cash out.

Do annuity rates change?

Yes, often weekly, with interest rates. Once you buy, your payment is locked for life.

Sources

Annuity rates by age (life only, best and average quotes, surveyed October 2, 2026) — ImmediateAnnuities.com. Accessed October 18, 2026.
Immediate annuity quotes — Blueprint Income. Accessed October 18, 2026.
How much does a $100,000 annuity pay per month in 2026? (Annuity.org figures) — CBS News. Accessed October 18, 2026.
What a $100,000 annuity pays per month (Schwab quotes, November 2025) — SmartAsset. Accessed October 18, 2026.
Should clients wait to purchase an annuity? (payouts and bond yields) — Advisor Perspectives (David Blanchett). Accessed October 18, 2026.
Stop comparing annuity payout rates to the 4% rule — ThinkAdvisor (David Blanchett). Accessed October 18, 2026.
Publication 939, General Rule for Pensions and Annuities — IRS. Accessed October 18, 2026.
Publication 575, Pension and Annuity Income — IRS. Accessed October 18, 2026.
26 CFR § 1.72-9, Tables (Table V expected return multiples) — Legal Information Institute, Cornell Law School. Accessed October 18, 2026.
26 U.S. Code § 72: annuities; §72(b) exclusion ratio, §72(q) and (t) early-distribution exceptions — Legal Information Institute, Cornell Law School. Accessed October 18, 2026.
Notice 2026-27: mortality tables for 2027 — IRS. Accessed October 18, 2026.
Period Life Table, 2023, as used in the 2026 Trustees Report — Social Security Administration. Accessed October 18, 2026.
Retirement plan and IRA required minimum distributions FAQs — IRS. Accessed October 18, 2026.
How you're protected: annuity coverage limits by state — NOLHGA. Accessed October 18, 2026.

Last checked October 18, 2026. We don't sell annuities or take commissions.