How does the immediate annuity calculator work?
Enter the amount you would convert, your age and sex, whether the income covers just you or you and a spouse (with their age and sex), and a payout option: life only, 10 or 20 years certain, or cash refund. The tool runs those inputs through an annuitant mortality model at typical 2026 pricing and estimates the monthly guaranteed income that amount could generate, which you can use as a planning range before requesting a real quote.
What kind of paycheck could your savings generate?
Picture a 67-year-old man handing an insurer $100,000 for a life-only contract. Under typical current pricing, that gets him somewhere around $650 to $700 in monthly income, roughly $7,800 to $8,400 across a year. A woman of the same age tends to see a somewhat smaller check, since insurers price around her longer expected life span, and a contract built to cover two spouses jointly settles in between the two single-life figures. Where you land depends on the size of your deposit, your age, your sex, whether the contract covers a spouse too, and the payout option you settle on. Run your own numbers through the calculator above to get a planning range.
How to use the immediate annuity calculator
- Enter your amount and your age. Type in the lump sum you are considering converting and your current age. Waiting longer to buy generally raises the monthly payment, since the insurer expects to make fewer payments overall.
- Choose single or joint, and add a spouse if needed. Pick whether the income covers just you or you and a spouse, and if joint, enter your spouse's age and sex as well.
- Pick a payout option. Choose life only for the largest monthly check, or trade some income for protection with a 10-year certain, 20-year certain, or cash refund option.
- Read the estimate. Treat what comes back as a planning range, not a locked-in offer, and follow up with a licensed strategist for an actual carrier-by-carrier quote when you are ready to move forward.
What a single premium immediate annuity actually is
A single premium immediate annuity, or SPIA, is purchased with one lump-sum payment to an insurance company. In return, the insurer commits to paying you income, usually starting somewhere between one and twelve months later. On a single contract that income runs as long as you are living; set it up jointly and it keeps going until neither you nor your spouse remains. It works much like buying yourself a private pension: the payments are contractual and fixed, and nothing about them depends on how stocks or bonds perform that year.
The moment the contract is funded, your lump sum stops being a pool of money you control and becomes a promise the carrier is legally bound to keep, for however many years you happen to live. Because pricing runs off your age and sex rather than a health questionnaire, there is no medical exam to pass. Curious how a guaranteed-rate accumulation contract compares before you commit to turning savings into income? Our fixed annuity calculator and our MYGA guide are worth a look first.
The payout options this calculator offers
A plain life-only SPIA produces the biggest monthly check, because the insurer's obligation to pay ends the moment you, or your joint annuitant, pass away. Most buyers choose to give up a little income in exchange for some form of protection instead. The table below covers the options available in this calculator.
| Payout option | What it does | Effect on your monthly income |
|---|---|---|
| Life only | Pays as long as you are alive, nothing passes to heirs | Highest payment |
| 10 years certain | Guarantees at least 10 years of payments even if you pass away sooner, then continues for life if you outlive the term | Slightly lower |
| 20 years certain | Same idea as the 10-year version, but the guaranteed floor stretches to 20 years | Lower than the 10-year certain option |
| Cash refund | Pays any unused portion of your premium to your beneficiaries if you pass away before collecting it all | Modestly lower than life only |
With either certain-period option, outliving the guaranteed years simply means your payments keep going for life exactly as they would under life only. Dying before the guaranteed period ends means your beneficiaries receive the payments for whatever years remain. A cash refund solves a similar worry in a different way, protecting your heirs from an early death without the same drag on your monthly income. Choosing single versus joint changes who the payments cover; the payout option you pick then applies on top of that choice.
What actually sets the size of your payment
Three forces drive a SPIA quote more than anything else. Your age matters most: an 80-year-old collects noticeably more per month on the same premium than a 65-year-old does, simply because the insurer expects to make fewer total payments. Sex plays a role too, since women live longer on average, so a woman's payment on an otherwise identical contract usually runs a little below a man's. Prevailing interest rates set the backdrop for every quote: when rates are higher, insurers can afford to promise more income, and when rates fall, so do the payouts. Because pricing shifts with rates, a real quote is typically only good for a week or two. Two companion tools worth trying alongside this one: the income rider calculator for a deferred version of this same idea, and the retirement income gap calculator to see how much of a monthly shortfall a payment like this would actually close.
The trade you are making
One reason a SPIA can out-earn a bond ladder or a savings account is that the choice, once made, is rarely reversible. Your deposit becomes the insurer's obligation to pay you, not a balance you can request back as cash whenever you change your mind. Giving up that flexibility is what buys the guarantee: income that keeps arriving no matter how long you live, which happens to be the exact fear that keeps most retirees up at night.
A practical rule many retirees follow is to convert only enough savings to cover the non-negotiable bills, housing, food, medical costs, and leave everything else sitting in accounts they can tap freely for travel, surprises or opportunities. Since guaranteed annuity income so often gets paired with a Social Security claiming decision, plenty of people run this tool right alongside the Social Security claiming calculator.
How inflation affects a level payment
Because a standard SPIA locks in one flat dollar amount for the entire payment stream, rising prices quietly shrink what that check covers as the years go by. Retirees generally handle this one of two ways. Some add a rider that steps the payment up each year, either a fixed percentage or one tied to the CPI, accepting a noticeably smaller check on day one in trade for growth later. Others take the bigger starting payment and lean on a separate investment account to keep pace with rising costs instead. Neither approach is automatically correct; the right call hinges on what share of your total retirement income the annuity represents and how many years you expect to draw on it.
A worked example. Carla, 68, has $320,000 set aside and brings in $2,450 a month from Social Security, against essential bills that run about $2,950 a month, a gap of roughly $500.
She runs a $70,000 premium at age 68 through the calculator on a life-only basis and gets back an estimate near $530 to $560 a month, about $6,400 to $6,700 a year, more than enough to close her shortfall. Because she wants her son and daughter to inherit anything she has not yet collected, she reruns the same numbers with the cash refund option selected, which shaves the monthly figure down slightly in exchange for that guarantee.
Carla goes ahead with the $70,000 annuitization, covers her monthly gap, and keeps the other $250,000 working in liquid investments. A relatively small slice of her nest egg now produces income she cannot outlive, while the rest of her savings stays flexible for whatever comes up.
Frequently asked questions
What is a single premium immediate annuity?
It is an insurance contract funded with one payment up front, and in return the carrier owes you a recurring check that typically begins within a handful of months. Set it up on your own life and the checks continue until you pass; add a spouse and they keep landing until neither of you is left. Think of it as building yourself a private pension, one whose payments have nothing to do with how the markets perform.
Can the payments ever run out while I am still alive?
They cannot. Whether you choose a single-life or a joint-life payout, the contract is built to keep sending checks for however many years you (or you and your spouse) end up living, short retirement or long one. Eliminating the fear of outliving your money is exactly why most buyers choose this product.
What happens to the money if I pass away early?
It depends entirely on which payout option you picked. A pure life-only contract simply stops paying, with nothing left for heirs. If you chose a cash refund or a period-certain option instead, any premium you had not yet collected, or whatever remains of the guaranteed years, goes to your beneficiaries.
Does an immediate annuity protect against inflation?
A standard SPIA locks in the same dollar payment for life, so inflation gradually reduces what that payment can buy. Some contracts offer a rider that increases your income each year to help offset this, but adding it lowers your starting payment. Many buyers instead keep the larger fixed payment and let other investments carry the inflation-fighting job.
How is the income from a SPIA taxed?
If you funded the SPIA with money that was already taxed, each payment is split between a tax-free return of your original principal and a taxable interest portion, figured using the exclusion ratio. If the SPIA was funded from an IRA or 401(k), the entire payment is generally taxed as ordinary income. Confirm the details with a tax professional before you decide.
Sources
Educational only, not investment, tax or legal advice. Tax Free Wealth Plan LLC is a licensed insurance agency, not a registered investment adviser or broker-dealer. Annuities are not bank deposits, are not FDIC insured and are not guaranteed by any government agency. Guarantees are backed solely by the claims-paying ability of the issuing insurance company. Features, rates and availability vary by state and change over time; the contract and disclosure documents govern.