Annuity Payout Calculator Estimate lifetime income from annuities — with life, joint, period-certain, and inflation-adjus...
Annuity Payout Calculator
Estimate lifetime income from annuities — with life, joint, period-certain, and inflation-adjusted options.
Immediate Annuity Formula**:
$$PMT = \frac{P \times r}{1 - (1 + r)^{-n}}$$
Where: • $P$ = premium • $r$ = monthly interest rate • $n$ = expected number of payments (based on mortality tables)
2025 Mortality Assumptions** (Annuity 2000):
- 65-year-old male: ~22 years life expectancy
- 65-year-old female: ~24.5 years
- Joint 65/63: ~28 years (first-to-die basis)
Example: $250K premium, 5% rate, 65M → **$1,395/mo for life** Joint 100% → **$1,180/mo** (lower due to longer payout period)
⚠️ Watch for these pitfalls:
- High-commission variable annuities** — 5–7% upfront fee + 2.5% annual M&E
- Surrender charges** — 7–10% for first 7–10 years (locks up liquidity)
- “Bonus” annuities** — 2% bonus but 0.25% lower payout yield = net loss
- Unnecessary riders** — death benefit on SPIA = redundant (life-contingent)
✅ Best Practices**:
- Use low-cost **SPIAs** (Single Premium Immediate Annuities) from A+ insurers (Symetra, Canvas, Pacific Life)
- Compare quotes at **Blueprint Income**, **Blueprint Income**, or **AnnuityAdvantage**
- Ladder purchases: buy 3 annuities over 3 years to mitigate interest rate risk
| Premium | Age/Gender | Payout | Annual Yield |
|---|---|---|---|
| $250K | 65M | $1,395/mo | 6.7% |
| $250K | 65F | $1,305/mo | 6.3% |
| $300K | 65/63 Joint 100% | $1,415/mo | 5.7% |
| $200K | 20-Yr Certain | $1,670/mo | 8.0% |
📉 Taxation (Exclusion Ratio)**:
- $250K premium, $1,395/mo, 22-yr life expectancy → $250K / ($1,395 × 12 × 22) = 68% exclusion
- → $948/mo tax-free, $447/mo taxable (ordinary income)
➡️ Immediate Annuity
“I have $250K to convert to lifetime income — what will I get?”
➡️ Deferred Annuity
“If I let $100K grow 10 years at 4%, what’s the future payout?”
➡️ Period Certain
Guaranteed 10/15/20 years — even if you pass early.
➡️ Joint & Survivor
Ensure spouse continues receiving income after your death.
Note: Uses 2025 annuity rates (4.2–5.8%), Annuity 2000 mortality, and IRS exclusion ratio rules.