How Much Does a $1 Million Annuity Pay
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When you’ve built a nest egg of $1,000,000, the next question is simple—but huge: How much does a $1 million annuity pay, and will that income be enough? For many retirees, the goal is to convert a portion of their savings into a steady paycheck they cannot outlive, while still keeping flexibility and control over the rest of their portfolio.
Instead of guessing, you can use a combination of guaranteed annuity quotes and planning tools to see what a $1,000,000 annuity might pay at different ages and under different options—single life, joint life, period certain, and more. At Diversified Insurance Brokers, we shop income-focused annuity options from more than 100 highly rated carriers so you can see real, side-by-side numbers and decide how much of your retirement income you want to lock in with guarantees.
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How a $1,000,000 Annuity Turns into Income
When you move $1,000,000 into an annuity, you’re trading a lump sum for a contractual income promise. Depending on the type of annuity you choose—immediate, deferred income, or a fixed indexed annuity with an income rider—that promise can start right away or at a future date you select.
With a lifetime income option, the insurance company calculates a payout rate based on factors like your age, the guarantees you choose, and whether the income will cover one life or two. That payout rate is applied either to your premium or to a benefit base value, resulting in a guaranteed annual income that continues as long as you (and possibly your spouse) are alive.
For example, the same $1,000,000 can produce very different incomes for a 60-year-old versus a 75-year-old, and for a single-life payout versus joint lifetime income with a survivor benefit. This is why it’s not enough to ask “What’s the rate?”—you need to see how those rates translate into actual dollars on a quote.
Lifetime Income Calculator for a $1,000,000 Annuity
To move beyond rules of thumb, you can use a real-time annuity income calculator to see how much guaranteed income a $1,000,000 annuity might provide at different ages and payout structures.
Lifetime Income Calculator
Use this tool to estimate how much guaranteed lifetime income your annuity could provide at different start ages and options.
💡 Note: The calculator accepts premiums up to $2,000,000. If you’re investing more, results increase in direct proportion —
for example, a $1,000,000 annuity would generally produce about half the guaranteed income of a $2,000,000 annuity using the same options.
Sample Income Ranges for a $1,000,000 Annuity
The exact income from a $1,000,000 annuity depends on current interest rates, the specific product, and the guarantees you select. That said, many retirees find it helpful to think in terms of payout ranges.
For instance, an income-focused annuity might generate a lower annual payout if you start income at 60 and add rich survivor benefits, and a higher annual payout if you wait until 70 and choose a single-life option. Some lifetime income designs also reward deferral by increasing your benefit base each year you wait to turn income on.
Because these numbers change over time, the most reliable way to see what your $1,000,000 could pay is to request updated illustrations based on your age today and your desired income start date. Comparing quotes from multiple carriers often reveals a meaningful spread in the guarantees available—especially when you’re working with a seven-figure premium.
Key Factors That Determine How Much $1,000,000 Can Pay
Several moving parts come together to determine your final income number. Understanding them can help you decide which type of annuity and payout structure fits best.
Your age and income start date. The older you are when income begins, the higher the payout rate usually is, because the insurance company expects to pay benefits for fewer years. A 70-year-old starting income immediately will generally see a higher guaranteed percentage than a 60-year-old using the same product. Some retirees choose to purchase an annuity in their early 60s and then defer income until a later age to increase the payout.
Single life vs. joint life. A single-life annuity is designed to pay as long as one person is alive. Joint lifetime income covers two lives—often spouses—so payments continue for the survivor. To account for that longer potential payout period, joint-life income usually starts a bit lower than single-life income for the same premium and starting age. The “best” choice comes down to how important survivor income is in your household plan.
Type of annuity you choose. An immediate annuity starts income right away and is built almost entirely around the payout. A deferred income annuity or fixed indexed annuity with an income rider may offer a combination of accumulation and future lifetime income. The way the contract calculates and grows your benefit base can have a major impact on how much your $1,000,000 annuity pays by the time you turn income on.
Additional guarantees and riders. Many income-focused annuities allow you to add features such as period-certain guarantees, cash refund provisions, or inflation-adjusted payments. These add valuable protection but often reduce the initial payout somewhat, since the insurer is promising more benefits in different scenarios.
Comparing a $1,000,000 Annuity to the “4% Rule”
For years, many investors leaned on the traditional 4% rule as a guide: withdraw 4% of your starting portfolio each year (adjusted for inflation), and historically the odds of your money lasting 30 years have been reasonable in many scenarios. On a $1,000,000 portfolio, that would suggest an initial withdrawal of $40,000 per year.
A lifetime income annuity takes a different approach. Instead of a flexible withdrawal rule with market risk, you convert part of your savings into a contractually guaranteed income stream. Depending on your age and the contract you choose, the guaranteed payout rate on a $1,000,000 annuity might be higher than 4%—especially later in retirement. In exchange, you give up some liquidity and upside in that portion of your portfolio in return for the income guarantee.
Many clients use a blend: they place enough of their savings into annuities to cover essential expenses with guaranteed income, and they keep the rest invested more flexibly for growth, legacy, or large one-time goals.
How a $1,000,000 Annuity Fits With Other Income Sources
A $1,000,000 annuity rarely exists in a vacuum. It’s usually part of a broader income picture that includes Social Security, pensions, IRAs, 401k/403b assets, and taxable investments. The goal is to coordinate these pieces so that essential expenses are secured, while you still have flexibility and tax control.
For example, some retirees use annuity income to create a stable floor of cash flow that covers housing, food, utilities, and healthcare. That foundation can make it easier to delay claiming Social Security if appropriate, which can increase your eventual benefit. Others use annuity income to reduce sequence-of-returns risk in the early years of retirement, allowing investment accounts to ride out market volatility with fewer withdrawals. If you’re exploring how lifetime income strategies fit with your broader plan, pages like what is the best retirement income annuity and how Social Security and annuities work together are helpful next steps.
Comparing Different Annuity Sizes to $1,000,000
One of the advantages of annuities is that income scales in a fairly straightforward way with the size of your premium. If you already have, or are considering, different funding levels, you can compare how $1,000,000 stacks up against other amounts.
For example, you might explore:
Reviewing multiple premium levels can clarify whether you want to commit the full $1,000,000, split it among several income contracts, or dedicate only part of your assets to guaranteed lifetime income while keeping other funds fully liquid.
Is a $1,000,000 Annuity the Right Move for You?
A $1,000,000 annuity can be a powerful tool if you want a high, reliable income stream and peace of mind that at least part of your retirement income is protected from market swings and longevity risk. It can be especially appealing for those who don’t have a traditional pension but want to create a similar effect—a personal pension built from their own savings.
On the other hand, an annuity may not be the right place for every dollar you’ve saved. Some people prefer to keep extra cash reserves, maintain a bucket of assets for legacy or opportunistic investing, or preserve maximum flexibility for unexpected goals. The decision is less about whether annuities are “good” or “bad” and more about how much guaranteed income you want relative to other sources.
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Share your age, state, and timing, and we’ll compare guaranteed income options from multiple annuity carriers so you can see what a $1,000,000 annuity can truly pay in your situation.
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FAQs: How Much Does a $1 Million Annuity Pay?
How much monthly income can I get from a $1 million annuity?
The monthly income from a $1,000,000 annuity depends on your age, the type of annuity, current rates, and whether you choose single or joint lifetime income. Older ages and shorter expected payout periods generally support higher payout percentages. The most accurate way to see your income is to run updated quotes for your specific age and start date.
Does starting income later increase how much my annuity pays?
Yes, in most cases. If you delay the start of income, the payout percentage often increases because the insurance company expects to pay benefits for fewer years. Many income-focused annuities also grow a benefit base during the deferral period, which can further increase guaranteed income when you turn payments on.
What’s the difference between single-life and joint-life payouts?
A single-life annuity pays as long as one person is alive, which typically results in a higher monthly payment. A joint-life annuity is designed to pay income for as long as either covered person (often spouses) is alive, so the initial monthly amount is usually lower to reflect the longer potential payout period.
Can I add guarantees for beneficiaries to a $1 million annuity?
Many annuities offer options such as period-certain guarantees, cash refund features, or enhanced death benefits. These protections can help ensure that your $1,000,000 does not simply disappear at death if you pass away earlier than expected, but they typically reduce the starting income to account for the additional guarantee.
Is income from a $1 million annuity affected by market downturns?
With fixed and income-focused annuities, once your guaranteed payout is set, market downturns do not reduce the promised income. That stability is one of the key reasons retirees use annuities to create a personal pension from part of their savings.
How does a $1 million annuity compare to following the 4% rule?
The 4% rule is a guideline for withdrawing from an investment portfolio, not a guarantee. A $1,000,000 annuity, by contrast, can provide a contractually guaranteed payout for life. In some cases the annuity’s payout rate may be higher than 4%; in others, it may be lower, but with the trade-off of more certainty and protection from longevity risk.
Can I still access my money if I use my $1 million for lifetime income?
Access depends on the type of annuity. Some lifetime income annuities are designed primarily for income and offer limited liquidity. Others, such as certain fixed indexed annuities with income riders, may allow partial access to account value while still supporting guaranteed withdrawals. It is important to review each contract’s liquidity rules before committing your $1,000,000.
Is it smart to put all of my $1 million into an annuity?
Most people prefer a balanced approach. Many retirees use annuities to cover essential expenses with guaranteed income and keep a portion of their assets in liquid accounts or market investments for flexibility, growth, and legacy. A personalized plan can help you decide how much of your $1,000,000 should be dedicated to guaranteed income.
About the Author:
Jason Stolz, CLTC, CRPC, is a senior insurance and retirement professional with more than two decades of real-world experience helping individuals, families, and business owners protect their income, assets, and long-term financial stability. As a long-time partner of the nationally licensed independent agency Diversified Insurance Brokers, Jason provides trusted guidance across multiple specialties—including fixed and indexed annuities, long-term care planning, personal and business disability insurance, life insurance solutions, and short-term health coverage. Diversified Insurance Brokers maintains active contracts with over 100 highly rated insurance carriers, ensuring clients have access to a broad and competitive marketplace.
His practical, education-first approach has earned recognition in publications such as VoyageATL, highlighting his commitment to financial clarity and client-focused planning. Drawing on deep product knowledge and years of hands-on field experience, Jason helps clients evaluate carriers, compare strategies, and build retirement and protection plans that are both secure and cost-efficient.
