According to Blueprint Income, the average monthly payouts for men aged 60 to 75 investing in a $200,000 annuity could range from about $14,000 to $20,000 per year — $1,167 to $1,667 per month. For women, however, those rates drop to a range of $13,710 to $19,076, or $1,143 to $1,590 monthly.
How much does a $200,000 annuity pay per month? As of January 2025, with a $200,000 annuity, you'll get an immediate payment of $1,200 per month starting at age 60, $1,322 per month at age 65, or $1,425 monthly at age 70.
With a $300,000 fixed immediate annuity, a 65-year-old man could receive around $1,450 to $1,950 per month for life, while a 65-year-old woman may get $1,800 to $2,200 per month. These payments are guaranteed for as long as the annuitant lives.
There are a variety of options that are better than an annuity for retirement, depending on your financial situation and goals. These include deferred compensation plans, such as a 401(k), IRAs, dividend-paying stocks, variable life insurance, and retirement income funds.
As an example, your annual withdrawal at age 68 could be around $15,000, and by age 80, that withdrawal could be around $18,000. In sum, a $250,000 annuity could realistically pay you from $1,071 (guaranteed) up to $1,912 (non-guaranteed) per month.
The right time to buy
Financial advisors recommend starting annuity payments between the ages of 70 and 75. Immediate annuities: These annuities make more sense to purchase when you are near or at retirement because the payout usually starts right away.
Ideally, the rate of return on your investments is enough for you to live off of, so you never need to touch your principal. With $200,000 in your retirement savings and factoring in the average annual rate of return between 10–12%, you'll have between $20,000 and $24,000 to live off of each year.
Annuities are taxed based on whether they are qualified or nonqualified funds, with qualified annuities subject to income tax on withdrawals and nonqualified annuities taxed on earnings first, followed by a return of original contributions.
So then, your $1 million balance would begin compounding at 5.95% per year for the next five years, a period known as an annuity's accumulation phase. By the time you reach age 65, the annuity would have a value of just over $1.33 million, allowing you to begin taking payments of $4,450 per month.
If you die before the end of the period referred to as the “period certain,” the annuity will be paid to your beneficiary for the rest of that period. A typical period certain is usually 10 or 20 years. If you live longer than the “period certain,” you will continue to receive payments until you die.
A $250,000 immediate annuity could pay as much as $1,498 a month or $17,979 a year for a 65-year-old woman.
As long as you do not withdraw your investment gains and keep them in the annuity, they are not taxed. A variable annuity is linked to market performance. If you do not withdraw your earnings from the investments in the annuity, they are tax-deferred until you withdraw them.
For a $150,000 annuity with an annual rate of 5%, monthly payments could be around $994.50. If the payout is structured for the annuitant's lifetime, the monthly payment could be approximately $2,549 and slightly less at $2,537 for a 10-year certain payout option.
200K in income would be considered middle class tax bracket wise, but you're still over 5x richer than most Americans. It also boils down to where you live and if your money gets you privileges others can't access. 200K might not get you far in NYC or LA.
Rich retirees: In the 90th percentile, with net worth starting at $1.9 million, this group has much more financial freedom and is able to afford luxuries and legacy planning.
Summary. Retiring with $200,000 in savings will roughly equate to $15,000 annual income across 20 years. If you choose to retire early, you will need additional savings in order to have a comfortable retirement.
If buying an annuity would leave you without enough savings to cover unexpected expenses, or if you are prioritizing short-term savings goals, then an annuity may not be the right choice for you.
Using the UK Government's pension annuity calculator, you'll see that if you buy a £300,000 annuity at age 65, you could receive: A maximum, tax-free lump sum of £75,000. An annual, taxable income of £11,900 for the rest of your life.
Closing or cashing out an annuity altogether is an option if you need all the funds. However, this may also result in surrender charges, tax implications and the 10% federal tax penalty.
The $1,000 per month rule is designed to help you estimate the amount of savings required to generate a steady monthly income during retirement. According to this rule, for every $240,000 you save, you can withdraw $1,000 per month if you stick to a 5% annual withdrawal rate.
A $300,000 annuity could pay $1,798 a month or $21,575 a year for a 65-year-old woman purchasing an immediate single life annuity. Several variables factor into the calculation of annuity payouts, including the type of annuity, the payout period and the annuitant's life expectancy.