Annuity Payout Calculator

2026 SPIA Payout Rates By Age — Real Market Quotes

Annuity payouts increase dramatically with age because the insurance company expects to pay you for fewer years. Each year you wait between 65 and 75 raises your payout by ~3-5% on the same premium. This is the "deferral premium" — and it's why DIAs (Deferred Income Annuities) and QLACs are so attractive.

Why women's payouts are lower

Women statistically live longer than men — about 2-3 years longer at age 65. Insurers use sex-distinct mortality tables for individual annuities (allowed by federal law for non-employer products), so a 65-year-old woman gets ~5-6% less monthly income than a 65-year-old man on the same premium. For employer-sponsored qualified plans (401(k), etc.), unisex tables are required by the Norris decision (1983) and ERISA — so qualified annuities use unisex rates that fall between male and female single-life rates.

Real April 2026 SPIA quotes per ImmediateAnnuities.com survey across 12+ carriers. Sex-distinct rates per state insurance regulations. Unisex requirements for qualified plans per Arizona Governing Committee v. Norris, 463 U.S. 1073 (1983) and ERISA §205.

Payout Options Compared — Trading Income for Protection

Every payout option except "life only" reduces your monthly income. The reduction is the price of protection — protection for your beneficiaries, your spouse, or against early death. Pick the option that matches what you're actually trying to protect against.

Decision tree for payout option

• Married → Joint & Survivor (50%, 75%, or 100%). Higher survivor % = lower starting income. Pick based on how dependent spouse is on this income.
• Single, no heirs → Life only. Maximum income; no need to protect anyone.
• Single, want to leave money to heirs → Cash refund OR life + 20-year period certain. Cash refund typically simpler.
• Concerned about inflation → Life + 3% COLA. But understand the 20-30% starting reduction; takes 8-12 years to break even.

Payout option mathematics per actuarial standard practice. State insurance regulations govern available options. Period certain reductions vary slightly by carrier — these are mid-market estimates.

Joint Life Annuity — Math For Married Couples

A joint life annuity pays as long as EITHER spouse is alive. Because two lives last longer than one (statistically), the insurer must pay for more years — so the monthly amount is lower than single life. The 50%/75%/100% suffix indicates what fraction of the original payment continues after the FIRST spouse dies.

When to choose 50% vs 75% vs 100% survivor

• 50% survivor: Surviving spouse's expenses drop ~30-40% (no longer cooking for two, fewer bills, etc.). Combined with their own SS + savings, 50% may be enough.
• 75% survivor: Best balance for most couples. Surviving spouse's expenses are typically 60-75% of couple expenses, so 75% income matches well.
• 100% survivor: Use when surviving spouse has minimal other income / savings, or when one spouse has much higher income/assets and wants strong protection for the other.

"Gender of annuitant" tactic

For a married couple, you can sometimes get higher payouts by structuring the annuity around the older spouse / younger spouse strategically. Using the older spouse as primary annuitant on joint life often yields slightly higher payouts than using the younger spouse — because the insurer's joint life expectancy formula is closer to the older spouse's mortality. Get quotes both ways.

Joint life expectancy probabilities per Society of Actuaries 2025 Mortality Improvement Scale. Survivor percentage selection guidance per Wade Pfau, Michael Kitces. Carrier-specific joint annuity quotes vary 5-10% — shop multiple.

Tax Exclusion Ratio — How Much Of Each Payment Is Tax-Free?

For non-qualified annuities (purchased with after-tax money), the IRS lets you "recover" your principal tax-free over your IRS-defined life expectancy. The portion that's tax-free is calculated via the exclusion ratio. After you've recovered all your principal, subsequent payments become 100% taxable.

After the exclusion period

If you live PAST your IRS life expectancy, you've recovered all your tax-free principal. All subsequent payments become 100% taxable as ordinary income. For a 65-year-old male, this happens around age 82. So for years 1-17, you get the favorable exclusion ratio; from year 18+, full taxation.

If you die before the exclusion period ends

If you die before recovering all your principal tax-free, your beneficiary may be entitled to deduct the unrecovered basis on the final tax return — under IRC §691(d). Coordinate with the estate's tax preparer. This deduction can be valuable, especially if your beneficiary is in a high tax bracket.

For qualified annuities (IRA / 401k money)

Qualified annuity income is 100% taxable from day 1 as ordinary income — there's no tax basis to recover (you never paid tax on the contributions). The exclusion ratio doesn't apply. This is identical to traditional IRA distributions otherwise.

Exclusion ratio per IRS Pub 575 "Pension and Annuity Income." Treasury Regulation §1.72-9 prescribes mortality tables. §691(d) deduction for unrecovered basis at death.

COLA Rider — Worth The Lower Starting Payout?

A COLA (Cost of Living Adjustment) rider increases your annuity payment each year by a fixed percentage (typically 1-3%). The trade-off: your STARTING payment is 20-30% lower for a 3% COLA rider. The math is rarely favorable for typical retirees.

Why most advisors don't recommend COLA riders

• Social Security already has COLA — for most retirees, SS provides 30-50% of income with built-in inflation adjustment.
• Investment portfolios provide inflation protection. Your non-annuitized assets grow with markets that historically beat inflation by 4-6%.
• The 20-30% starting reduction is substantial. You're giving up real income today for inflation protection that may or may not happen.
• Fixed expenses don't grow with inflation. Mortgage (if fixed), some healthcare premiums, and Medicare Part B base premium grow more slowly than CPI.

COLA rider economics analyzed by Kitces "Real Annuities: Should You Pay The Premium?" Standard finding: flat + invested difference typically wins for healthy retirees with average longevity. Inflation-protected annuities (true CPI-linked) are very rare and even more expensive.