Retirees Can Expect $3,000 to $7,500 Monthly Payments from a $1 Million Annuity

A $1 million annuity can provide a guaranteed monthly income in retirement, with payouts varying based on factors such as age, gender, location, payout structure, and interest rates. Immediate annuities start payments within 12 months, while deferred annuities delay payouts. Quotes from five annuity companies were obtained, with a one-time fee of 2% for retail buyers.

A $1 million annuity can provide a guaranteed monthly income in retirement, with payouts varying based on factors such as age, gender, payout structure, and interest rates. Immediate annuities start payments within 12 months, while deferred annuities delay payouts. Quotes from five annuity companies were obtained, with a one-time fee of 2% for retail buyers.

As of July 2025, the best 3-year fixed annuity rate is 5.65% [2]. For a $1 million annuity, this rate would yield an annual interest of $56,500, or approximately $4,708 per month. The best 5-year fixed annuity rate is 6.45% [2], which would yield an annual interest of $64,500, or approximately $5,375 per month. The best 7-year fixed annuity rate is 6.60% [2], resulting in an annual interest of $66,000, or approximately $5,500 per month.

Immediate annuities offer more income in the early years but may not recoup the initial premium as quickly as deferred annuities. Deferred annuities provide higher monthly income but start later. For example, a single-life payout, lifetime annuity, male age 65, no cash-refund option, with a $1 million premium deposit, would yield a monthly income of $1,314.39 [1]. If the income is deferred to age 75, the monthly income would increase to $3,124.36 [1].

Inflation-adjusted annuities can protect against future inflation risk but may have lower initial payments. For instance, a joint-life payout, male age 65 / female age 65, no cash-refund option, income deferred to age 75, with a 2% annual increase in monthly income, would start at $2,010.20 and grow to $2,987.05 after 20 years [1].

The choice of annuity type and payout structure depends on individual financial goals and risk tolerance. It is essential to consult with a financial advisor to determine the best option for your specific situation.

References:

[1] https://www.kiplinger.com/retirement/annuities/how-much-income-can-you-get-from-an-annuity
[2] https://myannuitystore.com/annuities/fixed-annuity-rates/5-year/