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Monthly payout from $250,000
| Rate | 10 years | 15 years | 20 years | 25 years | 30 years |
|---|---|---|---|---|---|
| 3% | $2,414 | $1,726 | $1,386 | $1,186 | $1,054 |
| 4% | $2,531 | $1,849 | $1,515 | $1,320 | $1,194 |
| 5% | $2,652 | $1,977 | $1,650 | $1,461 | $1,342 |
| 6% | $2,776 | $2,110 | $1,791 | $1,611 | $1,499 |
| 7% | $2,903 | $2,247 | $1,938 | $1,767 | $1,663 |
Worked example
r = 5% ÷ 12 = 0.004167, n = 240. Payout = $250,000 × 0.004167 ÷ (1 − 1.004167−240) = $1,649.89. Total received: $395,973.
Lifetime annuities are priced differently
A lifetime (single premium immediate) annuity pays until death, so the insurer prices it on your age, sex and life expectancy. Those quotes cannot be derived from a formula; ask several insurers. A period-certain payout, shown here, ends after the chosen years, with any remaining payments going to a beneficiary.
Sources and assumptions
- Ordinary annuity formula, monthly compounding.
Related
Frequently asked questions
How much does a $250,000 annuity pay per month?
About $1,649.89 for 20 years at 5%, as a fixed-period payout.
Does an annuity pay for life?
Only a lifetime annuity does. Period-certain payouts stop after the chosen number of years.