Retirement Income Tool
Income Annuity Estimator
See how much guaranteed monthly income your savings could generate through an immediate income annuity.
I built this estimator for clients exploring guaranteed income as part of their retirement plan.
No sign-up required · Instant results
Estimated Monthly Income
$0/mo
$0 per year
7.15% effective payout rate
Educational estimate based on your inputs and representative payout rates, not a prediction of actual results.
Based on a $250,000 investment at age 65, you could receive approximately $1,490/month in guaranteed income for life, with payments guaranteed for at least 10 years.
Compare Payout Options
Life Only pays the highest income. Longer guarantee periods reduce monthly payments but protect your beneficiaries.
Want to explore if an income annuity fits your retirement plan?
A Farther advisor can help you evaluate annuity options alongside your full financial picture.
Schedule a Virtual MeetingAt 65, a $250,000 premium pencils to $1,490/month for life. The right move depends on the rest of your retirement income.
This is an estimate, not a number to plan around alone.
This calculator is an educational tool to help you think through scenarios. The results are illustrative estimates based on the inputs you provided and general assumptions. They are not financial advice, and the numbers shown should not be relied on as exact to your situation.
Real outcomes depend on factors a calculator can't fully model: your complete tax picture, plan-specific rules, market performance, IRS rate changes, life events, and how all the pieces of your financial life interact. Past performance does not guarantee future results.
This tool does not collect, store, or transmit any financial data.
Payout rates shown are hypothetical and based on industry averages as of Q1 2026. They do not represent any specific annuity product, are not guaranteed, and are not an offer to sell or solicitation to purchase any annuity. Actual quotes will vary based on the insurance carrier, current interest rates, product features, and underwriting. Annuities are insurance products and may involve surrender charges, fees, and other limitations. Farther Finance Inc. is a registered investment adviser with the SEC; registration does not imply a certain level of skill or training. See our Form ADV Part 2A on the disclosures page.
Before making any decision based on these numbers, let's talk. I'll look at your full picture, pressure-test the assumptions, and help you understand what these numbers actually mean for you, at no cost.
By Jay Chang, VP, Wealth Advisor
Last updated July 6, 2026
What Is an Income Annuity?
An income annuity converts a lump sum into a monthly paycheck, usually for life. You hand an insurance company a premium, and the insurer pays you a fixed amount every month regardless of what markets do.
It is the closest thing to buying a private pension. The trade is control for certainty: the income cannot run out, but the lump sum is no longer yours to invest, spend, or leave behind. That trade is worth pricing before you decide anything, which is what this estimator does.
When Does Guaranteed Income Make Sense?
An annuity earns its place when steady income solves a specific problem. The cases where I see it fit:
- No pension, high fixed expenses. If Social Security alone will not cover housing, healthcare, and food, an annuity can close the gap so essentials never depend on market returns.
- Retiring earlier than planned. A layoff or buyout at 58 can leave years before Social Security starts. Guaranteed income is one of the options I walk through in my guide to forced early retirement decisions, and the bridge math matters when you retire at 58 with benefits designed for 65.
- Worry about outliving your money. Lifetime payouts remove longevity risk from the covered portion of your plan. That peace of mind has real value for some retirees and none for others.
- Comparing a pension lump-sum offer. Pricing what an insurer would charge for the same monthly income is the cleanest way to judge whether a lump-sum buyout is fair.
The counterargument deserves equal weight. Annuity dollars are locked, most fixed payouts do not rise with inflation, and heirs inherit nothing from a Life Only contract. In the plans I build through my retirement planning work, an annuity covers a baseline of essential spending at most. The rest of the portfolio stays invested and accessible.
How to Use This Calculator
- Set the lump sum you would use to purchase the annuity. The minimum is $25,000.
- Enter your current age and gender. Payouts rise with age because payments span fewer expected years.
- Choose a payout option: Life Only pays the most but stops at death, while guarantee periods protect your beneficiaries.
- Read the estimated monthly and annual income, the effective payout rate, and the side-by-side option comparison.
Income Annuity Questions I Hear Most
What is an immediate income annuity?
A contract with an insurance company: you pay a lump sum, and the insurer pays you fixed monthly income, usually for life, starting within about a year. You are trading a piece of your portfolio for a paycheck that does not depend on markets.
How much monthly income will I get?
It depends on your age, current interest rates, your gender, and the payout option. Older buyers get more because payments span fewer years, and rates move with the bond market. This estimator uses representative rate tables; a real quote from an insurer will differ.
What is the difference between Life Only and a guarantee period?
Life Only pays the highest income but stops at death, even if that comes early. A guarantee period keeps paying your beneficiaries if you die before it ends, in exchange for a smaller check. Couples often prefer joint-life options, which pay as long as either spouse is alive.
Is annuity income taxable?
It depends on the funding source. Bought with IRA or other pre-tax money, every payment is ordinary income. Bought with after-tax savings, part of each payment is a tax-free return of principal under an exclusion ratio. The account you fund it from changes the tax bill on identical income.
Should I put all my savings into an annuity?
Almost never. The lump sum stops being available for emergencies, opportunities, or inheritance. At most, I use an annuity to cover baseline essential expenses alongside Social Security, and you can model your Social Security claiming ages to see how big that baseline already is.