How Much Does A $50,000 Annuity Pay Per Month?

Annuities are a popular way for retirees to earn a regular income after they’ve stopped working. You can earn different amounts of money every month depending on the type of annuity, how old you are, where you live and other factors. If you’re thinking about getting a $50,000 annuity in retirement, here’s what you can expect the monthly payout to be.

Annuities are financial agreements between you and an insurance company. You can purchase an annuity with a lump sum or through multiple payments, known as premiums. Your payout can also be received as a lump sum or through a set number of disbursements, depending on your agreement.

Some annuities provide an income stream for the rest of your life (or potentially for your partner’s life). There are a few different types of annuities: fixed, variable, immediate and deferred.

The type of annuity you buy and use determines when and how much you get paid.

Annuities come in various forms, each designed to meet different financial needs and preferences. Understanding the distinct types of annuities—fixed, variable, immediate and deferred—can help you make informed decisions about your retirement income strategy. Below, we’ll explore each type and provide examples of monthly payouts to illustrate how they work.

Fixed annuities pay a set amount in both payments and interest over a determined amount of time. After you make your payment or set of payments to your insurance company, you’ll get monthly fixed disbursements based on a set interest rate.

A $50,000 fixed annuity has different payouts for different types of people. Remember that you’ll get a payout immediately if you get an immediate annuity. But if you get a deferred annuity, you’ll receive your payout later, so your money has time to grow, allowing you to earn more when you cash out.

Age and gender significantly influence annuity payouts. Generally, females tend to live longer than males, resulting in lower monthly payouts to ensure benefits last throughout their lifetimes. For example, a 65-year-old male receiving an immediate payout from a $50,000 fixed annuity can expect around $317 per month, totaling $3,804 annually. In contrast, a 65-year-old female in the same situation would receive approximately $302 per month, or $3,624 annually.

However, older individuals can anticipate larger payouts. For instance, an 80-year-old male averages $514 per month, while an 80-year-old female receives about $471 monthly.

With variable annuities, payments fluctuate based on investment performance and interest rates. However, some contracts may offer a minimum payment guarantee set by the insurance provider. The money you pay into your annuity goes into an investment account, meaning there is a chance you could lose money depending on what the company invests on your behalf.

How much you earn depends on market returns, your risk tolerance and what you’re investing in, so it could be a wide range of earnings. Over the last 30 years, the stock market has averaged around 8% to 11% returns per year for investors, which is what you can probably expect if you had a $50,000 variable annuity.

If you purchase an immediate annuity, you’ll immediately start receiving disbursements. How much you receive depends on your age, sex, how long you’ll receive payments, whether it’s a single or joint policy and any other factors contributing to your policy’s cost and payout.

Monthly payments vary widely for a $50,000 immediate annuity. The average monthly payout for a 70-year-old male with a single policy would be around $358. A female with the same criteria can expect around $338 per month.

When purchasing a deferred annuity, you make a lump-sum payment or series of payments for an annuity but wait for your disbursements. Like immediate annuities, costs vary based on many factors, but because you waited, your money gets invested and grows tax-deferred. Waiting to get a payout can result in a higher monthly income.

Deferred annuities are either fixed or variable, depending on the type of payout you’d like later on. You can choose a fixed annuity if you want a guaranteed interest rate with a set monthly payment. On the other hand, if you’d rather have the option to earn more through investments, you may want to choose a variable annuity.

Several key factors determine the amount you receive in monthly annuity payments. Understanding these influences can help you better manage your income stream and plan for the future.

While a $500,000 annuity may suit some people, it isn’t the right choice for everyone. If you’re considering this option, explore your alternatives and carefully assess your current and future needs. Also, consider how much you can afford and what you want to earn in retirement.

If you’re worried or unsure of where to start, consider talking to a financial advisor. Look for a fee-only fiduciary advisor with experience in annuities or to be referred to someone who can fill that role. Remember to review all your options before buying an annuity and try to talk it over with an expert first.

Annuities can provide guaranteed retirement income, especially if your other sources, like pensions or Social Security, fall short. However, the monthly payout of a $50,000 annuity varies based on factors like age, gender, annuity type and interest rates. To avoid surprises, align your expectations with your financial advisor before investing.

Editor Norah Layne contributed to this article.