Annuity Calculator
Estimate your annuity payout by age and gender. Compare guaranteed SPIA income vs the 4% rule vs a bond ladder. Tax-deferred growth calculator with projected income.
Try another scenario
How to Use This Calculator
Annuity Payout tab
The default tab. Enter your lump sum, age, and gender to see how much guaranteed monthly income a Single Premium Immediate Annuity (SPIA) would provide. Compare all five payout types side-by-side: Life Only, Life + 10-Year Certain, Life + 20-Year Certain, Joint Life, and Period Certain. See your breakeven age and inflation impact.
Annuity Growth tab
Planning ahead? Enter your initial investment, monthly contributions, interest rate, and years until payout. See how your deferred annuity grows tax-deferred vs a taxable account. Get a projected monthly income at your payout age based on current SPIA rates.
Annuity vs Alternatives tab
The decision tool. Enter your lump sum and age to compare three strategies side-by-side: guaranteed SPIA income, the 4% withdrawal rule from a portfolio, and a bond ladder. See monthly income, total payouts over 20/25/30 years, longevity crossover age, and what remains for heirs.
Share your result
Every input is encoded in the URL. Click Share to send your exact scenario to a spouse, financial advisor, or family member.
The Formula
SPIA payout estimation uses published annuity rate tables that factor in age, gender, and payout type:
Payout Type Factors (from Life Only baseline):
Life Only = 1.000 (highest payout)
Life + 10yr Certain = 0.966 (~3.4% less)
Life + 20yr Certain = 0.900 (~10% less)
Joint Life = ~0.875 (~12.5% less, varies by spouse age)
Period Certain 20yr = 0.920 (~8% less)
Breakeven Age = Start Age + (Lump Sum / Annual Income)
Bond Ladder (amortizing): PMT = P × r / (1 − (1 + r)−n)
The Annuity Growth tab uses standard compound interest with tax-deferred vs taxable comparison. The Annuity vs Alternatives tab models a fixed SPIA vs a portfolio using the withdrawal rate with average market returns vs a fully amortizing bond ladder.
Annuity Rates in 2026
The elevated interest rate environment has pushed annuity payouts near 15-year highs:
- SPIA (Life Only, per $100K): Male 65 → ~$652/month, Female 65 → ~$627/month
- MYGA fixed rates: 5.85–6.50% for 3–7 year terms (vs ~3–4% in 2020–2021)
- MYGA vs CD: 5-year MYGA at 6.30% exceeds best 5-year CD at ~4.15% by 2.15 percentage points, plus tax deferral
- No OBBBA changes: Annuity taxation, RMD rules, and penalties unchanged by the One Big Beautiful Bill Act
- RMD age: 73 (SECURE 2.0), rising to 75 in 2033. Annuity payments can satisfy RMD requirements.
Example
Margaret — 64, recently retired, Westchester NY
$450K in 401(k) + $150K taxable savings. Social Security: $2,100/month starting at 65. Wants guaranteed income to supplement SS.
Annuity Payout tab ($450K SPIA at age 65)
Annuity vs Alternatives tab ($450K at age 65)
The annuity provides $1,245 more per month than the 4% rule ($2,745 vs $1,500) with zero market risk. The bond ladder pays even more ($2,969/mo) but runs out after 20 years — a serious risk for a 65-year-old woman with 20+ year life expectancy. The tradeoff: the annuity leaves nothing for heirs; the portfolio leaves an estimated remainder.
Margaret's decision
Margaret could annuitize $300K for $1,830/mo guaranteed + keep $150K invested for flexibility and heirs. Combined with SS ($2,100): $3,930/month guaranteed + $150K invested.
Types of Annuities
For most retirees seeking guaranteed income, a SPIA (Single Premium Immediate Annuity) is the simplest and most cost-effective option. Fixed annuities are tax-deferred alternatives to CDs. Variable and indexed annuities have higher fees (2-4% annually) and should be evaluated carefully.