How Much Does a $1 Million Annuity Pay Per Month?

For many people approaching retirement, $1 million represents a meaningful milestone. But the more important question is not how much you have saved; it is how much reliable monthly income that savings can generate. If you are considering using some or all of a $1 million portfolio to purchase an annuity, here is what the numbers actually look like.

Current Monthly Payout Estimates

Based on current data from Cannex, an independent annuity data provider, a $1 million immediate lifetime annuity pays approximately the following monthly amounts:¹

These figures represent a single premium immediate annuity (SPIA) with lifetime-only payments, meaning the insurer pays you every month for as long as you live, and payments stop at death. Adding a guaranteed payment period, a joint-life option, or a cost-of-living adjustment will reduce the monthly amount in exchange for additional protection.

Why Payouts Are Higher at Older Ages

The monthly payout increases with age because the insurance company's expected payment period is shorter. A 70-year-old purchasing a lifetime annuity will, on average, receive payments for fewer years than a 65-year-old, so the insurer can afford to pay more per month for the same premium.

Women receive slightly lower monthly payments than men of the same age because women have a longer average life expectancy. The Social Security Administration's actuarial tables show that a 65-year-old woman is expected to live approximately 2.5 years longer than a 65-year-old man.² Insurers price this difference into the payout rate.

Joint life annuities pay less per month because the insurer must continue payments as long as either spouse is alive, which extends the expected payment period. For a couple where both spouses are 65, the joint life payout is roughly 12% to 15% lower than the single life payout.

How Different Annuity Structures Affect the Monthly Amount

The figures above reflect an immediate annuity that begins paying within 30 days of purchase. Other structures produce different results.

Fixed index annuity with an income rider. A fixed index annuity (FIA) with a Guaranteed Lifetime Withdrawal Benefit (GLWB) rider allows your benefit base to grow before income begins. A $1 million FIA with a 6% simple interest roll-up, deferred for ten years and starting income at age 75, would produce a benefit base of $1.6 million. At a 5.5% payout rate for age 75, that generates $88,000 per year, or approximately $7,333 per month. The trade-off is the annual rider fee (typically 0.75% to 1.25% per year) and the fact that the payout is not guaranteed to start immediately.³

Deferred income annuity (DIA). A DIA purchased today with income beginning in 15 to 20 years can generate significantly higher monthly payments than an immediate annuity, because the insurer holds your money longer before payments begin. A $1 million DIA purchased at age 55 with income beginning at age 75 might generate $9,000 to $12,000 per month or more, depending on the carrier and interest rates at the time of purchase.

Period-certain annuity. If you want guaranteed payments for a specific number of years rather than for life, a 20-year period-certain annuity funded with $1 million would generate approximately $5,600 to $6,400 per month. Payments stop at the end of the term regardless of whether you are still alive, and there is no longevity protection.

Putting the Numbers in Context

At age 65, a $1 million immediate annuity generates roughly $6,285 to $6,530 per month for a single buyer. Combined with the average Social Security benefit of approximately $1,907 per month,⁴ total guaranteed income would be approximately $8,200 to $8,400 per month before taxes.

For reference, the Bureau of Labor Statistics reports that the average household headed by someone age 65 to 74 spends approximately $57,800 per year, or about $4,817 per month.⁵ A $1 million annuity combined with average Social Security benefits would exceed that average spending level by a meaningful margin, providing both coverage of essential expenses and a buffer for healthcare costs, travel, and unexpected needs.

Individual circumstances vary widely. A retiree with a paid-off home and modest lifestyle needs will find $8,000 per month more than sufficient. A retiree with significant healthcare costs, a mortgage, or a desire to maintain a higher standard of living may need more.

The Role of Interest Rates

Annuity payout rates are closely tied to long-term interest rates. When rates are higher, insurers can invest your premium at higher yields and offer more generous monthly payments. When rates are low, payouts shrink.

As of early 2026, interest rates remain at levels significantly higher than the 2010s, which is favorable for annuity buyers. The best available fixed annuity rate as of April 2026 is 7.65% for a 10-year term.⁶ Buyers who lock in rates in the current environment may benefit from payouts that would have been unavailable just a few years ago.

Should You Put the Full $1 Million Into an Annuity?

Most financial professionals do not recommend converting an entire portfolio into an annuity. The reason is that annuities are optimized for guaranteed income, not for growth, liquidity, or estate transfer. A more common approach is to annuitize enough to cover essential expenses (housing, food, healthcare, utilities) and keep the remainder in a diversified investment portfolio for growth, flexibility, and legacy.

For example, if your essential monthly expenses are $4,000 and your Social Security benefit is $2,000, you need $2,000 per month in additional guaranteed income. At age 65, that requires approximately $300,000 to $320,000 in an immediate annuity, leaving the remaining $680,000 to $700,000 invested for other purposes.

This "income floor" approach uses annuities to guarantee the baseline and investments to provide upside, rather than asking either tool to do everything.³

Getting an Accurate Quote

The figures in this article are based on current market data and are intended to provide a realistic starting point. Actual quotes will vary based on your specific age, the carrier you choose, current interest rates at the time of purchase, and the exact payout option you select.

Different carriers can offer meaningfully different payout rates for the same product structure. Shopping across multiple carriers and having an independent professional review the full picture of your income needs, existing assets, and retirement timeline is the most reliable way to make an informed decision.

The information in this article is for educational purposes only and does not constitute financial, tax, or legal advice. Annuity payout rates change frequently and vary by carrier. Consult a qualified financial professional before making any decisions about your retirement income.

Footnotes

1. Annuity.org. "How Much Does a $1 Million Annuity Pay Per Month?" (Data sourced from Cannex.) https://www.annuity.org/annuities/how-much-does-a-1-million-dollar-annuity-pay/ ↩

2. Social Security Administration. "Actuarial Life Table." https://www.ssa.gov/oact/STATS/table4c6.html ↩

3. Morningstar. "How Guaranteed Lifetime Withdrawal Benefits Work." Spencer Look, June 2025. https://www.morningstar.com/retirement/how-guaranteed-lifetime-withdrawal-benefits-work ↩ ↩²

4. Social Security Administration. "Monthly Statistical Snapshot, January 2025." https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/ ↩

5. Bureau of Labor Statistics. "Consumer Expenditure Surveys." https://www.bls.gov/cex/ ↩

6. Annuity.org. "Best Fixed Annuity Rates for April 2026." https://www.annuity.org/annuities/rates/ ↩