How Much Does a $750,000 Annuity Pay Per Month?

The amount you receive in monthly annuity payments depends on several factors, including interest rates, term length, age, gender, payout options and more.

In addition to these standard factors, annuities can be customized with riders. For example, if you’d like your annuity to adjust with inflation, you can add a cost-of-living adjustment rider. This means your monthly payments will increase if the cost of living rises.

Annuities provide diverse payout options to suit your financial goals. Whether you choose fixed, variable, index, immediate or deferred payments, understanding these types is key to securing steady income in retirement.

A fixed annuity is an annuity with a fixed interest rate and terms. Your monthly payout is the same every month for a set amount of months, years or the rest of your life.

After you make your annuity payment in full, you’ll start receiving fixed annuity payments either immediately or deferred. For a 65-year-old male, an immediate, lifetime annuity pays around $4,800 monthly, depending on individual annuity factors.

Variable interest rates change based on market and economic conditions. While fixed interest rates give you predictable payments every month, variable interest rates might cause your payments to change. If the stock market goes up, your payments could go up. If the market tanks, your payments could drop.

Variable annuities aren’t as easy to calculate because of market fluctuation. In the last 30 years, stock market returns averaged 7% to 10%, depending on your investments and security risk. You should expect about the same level of returns for a $750,000 annuity.

An index annuity is an annuity that’s invested in an index like the NASDAQ or S&P 500. Funds go into a mix of securities like stocks, bonds, index funds and your index’s performance determines your monthly payout. A higher performance means you could earn a higher monthly payment. If you lose monthly, you may not get as much.

Depending on investments, the S&P 500 averaged 10% to 12% in the last 50 years. You may get about the same returns if you have a $750,000 index annuity.

After paying for your annuity in full, you’ll start receiving payments immediately, usually within a month or so after your payment has gone through. An immediate annuity means you’re not putting off payments. Instead, you’re opting to get payments now instead of later. There isn’t much time for interest to accrue, but it gives you an immediate source of income during retirement.

For a 65-year-old woman, a $750,000 immediate, lifetime annuity will get you around $4,600 monthly.

A deferred annuity allows you to delay receiving payouts until a future date. You can purchase the annuity now and choose to start payments in one, five, 10 or even 20 years. The earlier you invest, the more time your money has to grow with interest, resulting in larger payouts when monthly payments begin.

For example, a 40-year-old woman who invests in a $750,000 annuity and plans to start receiving payments in 20 years—when she turns 60—will receive $11,144 per month. In contrast, a 50-year-old woman who invests the same $750,000 with payouts also beginning at 60 will receive $6,600 per month. The difference shows the significant impact of starting earlier.

Annuities are tailored to each individual, so it’s essential to consider various scenarios and how the payments might affect your short- and long-term goals.

Doug is a 65-year-old retiree who buys a $750,000 immediate, fixed annuity with a 20-year payout period. That means payments will stop once Doug is 85.

A $750,000 annuity will pay out $4,718 monthly for 20 years.

Darla is 60 and buys a deferred annuity with payments set to start in 10 years or when Darla is 70.

When Darla starts receiving payments, she’ll receive $12,343 per month for the rest of her life. This is important because if she waited until age 70 to purchase the annuity, her monthly payments would be $5,015 instead.

Drew and Diane are both 70 years old. They bought a $750,000 immediate, lifetime joint annuity. They’ll get payments right away for $4,434 monthly.

If they had bought that annuity earlier and deferred it even a few years, it would have set them up for a bit more per month. For instance, if they had bought the annuity at 65 with payouts at 70, they’d get $5,412 per month instead — almost $1,000 more. If they defer for 10 years, they’ll get $7,952 monthly.

If you’re seeking stable income, a fixed $750,000 annuity could be an ideal option. Purchasing an annuity early and deferring payouts allows more time for growth, potentially maximizing your future income.

With many types of annuities available, choosing the right one can be confusing. If you’re unsure, consider consulting a financial advisor—preferably a fiduciary—who is experienced with annuities and committed to prioritizing your best interests.

Editor Norah Layne contributed to this article.