Annuity Calculator Estimate lifetime income, compare annuity types, and model inflation protection — with 2025 mortality ...
Annuity Calculator
Estimate lifetime income, compare annuity types, and model inflation protection — with 2025 mortality tables and rate benchmarks.
Immediate Annuity Formula (Simplified)**:
$$ \text{Monthly Payout} = \frac{\text{Premium}}{\text{Present Value of Life Annuity}} $$
The present value uses:
- Mortality tables (2025 Annuity 2000)
- Interest rate (5.8–6.5% for 65-yr male in 2025)
- Payout option (life, joint, period certain)
Example** ($200K SPIA, 65M, life only): • Monthly = **$1,133** • Annual = **$13,596** • Payout rate = 6.80%
✅ Pro Tip**: Annuities beat DIY for *longevity risk* — mortality pooling ensures you can’t outlive your income.
⚠️ Avoid these dangerous practices:
- Teaser rates** — “7% guaranteed!” (only applies to bonus portion, not base)
- Surrender charges** — 7–9% in Year 1, 1% in Year 7 (common in deferred annuities)
- “Guaranteed income” without QLAC** — variable annuities with riders charge 0.5–1.5% for “guarantee”
- Indexed annuities with caps/floors** — 12% cap, 0% floor = ~4% long-term return
✅ Smart Buyer Tips**:
- Compare **payout rates**, not interest rates
- Use ImmediateAnnuities.com for unbiased quotes
- Consider **QLAC** (up to $26,520) to defer RMDs and fund late-life income
| Profile | Premium | Monthly Payout | Payout Rate |
|---|---|---|---|
| 65M, Life Only | $200K | $1,133 | 6.80% |
| 65F, Life Only | $200K | $1,075 | 6.45% |
| 65M/F, 100% Joint | $200K | $950 | 5.70% |
| 65M, 3% COLA | $200K | $965 | 5.79% |
📉 Breakeven Analysis** (SPIA vs. 4% portfolio):
- Live to 83? Annuity and portfolio equal
- Live to 90? Annuity pays **$72K more**
- Die at 78? Portfolio leaves **$85K to heirs**
➡️ Immediate Annuity
“$200K at 65 — what’s my lifetime income?” ($1,133/mo for male)
➡️ Deferred Annuity
“$150K deferred 10 years @ 5% — what’s the future value?” ($244K)
➡️ Inflation-Adjusted
Model $1,000/mo growing at 3% for 25 years → total = $482K
➡️ Annuity vs. Portfolio
Compare $200K SPIA ($13.6K/yr) vs. 4% withdrawal ($8K/yr, risk of depletion)
Note: Uses 2025 Annuity 2000 mortality, SSA life tables, and current insurer payout rates. Assumes no fees for SPIA; variable annuities modeled separately.