Free immediate annuity calculator
Turn a single lump-sum premium into income that starts now — enter your premium, an assumed rate and a payout period to see the monthly check and the payout factor of an immediate annuity (SPIA), updated live, as you type.
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Estimates only, based on the values you enter. Not financial advice.
Results are estimates. Consult a professional.
What is an immediate annuity?
An immediate annuity is a contract you buy with a single lump sum that the insurer converts, almost at once, into a guaranteed stream of income. Because it is funded by one payment and starts paying right away, it is usually called a single premium immediate annuity, or SPIA. There is no waiting and no growth phase: you hand over the premium today and the first check arrives within about a month to a year. This immediate annuity calculator shows the level monthly income a given premium would buy over the payout period you choose.
That immediacy is the whole point. A fixed annuity or a variable annuity typically spends years accumulating before paying out; a SPIA skips straight to income. People most often buy one at retirement to turn a 401(k) or IRA lump sum into a paycheck they cannot outlive — effectively buying themselves a private pension.
SEC Investor.gov: with an immediate annuity, you begin to receive payments soon after you make your investment, in exchange for a lump-sum premium.How the payout factor turns a premium into income
An immediate annuity is priced by a payout factor: the share of your premium the insurer pays out each year. Behind that factor is a present-value calculation — the insurer asks what level payment a lump sum can support, given an assumed interest rate and the length of the payout. This calculator uses that same period-certain payout math, solving for the monthly amount that exhausts the premium plus its interest over your chosen term.
Immediate vs. fixed vs. variable annuity
The clearest way to place an immediate annuity is by when it pays and what backs the payment. An immediate annuity (SPIA) pays now from a single premium, with the income guaranteed. A fixed annuity grows at a guaranteed rate first, then pays. A variable annuity grows in market sub-accounts and may pay more or less depending on how they perform.
| Immediate annuity (SPIA) | Fixed annuity | Variable annuity | |
|---|---|---|---|
| Premium | Single lump sum | Lump sum or series | Lump sum or series |
| Growth phase | None — pays at once | Yes, at a guaranteed rate | Yes, in market sub-accounts |
| Income certainty | Guaranteed and level | Guaranteed once annuitized | Varies with the market |
| Typical buyer | Retiree needing income now | Saver wanting rate certainty | Investor wanting upside |
Source: FINRA and SEC Investor.gov. A SPIA is distinguished by paying income immediately rather than after an accumulation phase.
A worked example using the immediate annuity calculator
A 67-year-old retiree moves $300,000 from an IRA into a single premium immediate annuity, with an assumed 4% rate, and wants guaranteed income for 15 years. What is the monthly check?
Step 1 — Set up the payout
The monthly rate is 4% ÷ 12 = 0.003333, and the number of payments is 15 × 12 = 180.
Step 2 — Solve the immediate income
Monthly income = $300,000 × 0.003333 ÷ (1 − 1.003333^−180) = $2,219.06. Payments start at once and are level for the whole 15 years.
Step 3 — Read the payout factor and total
Annual income is $2,219.06 × 12 ≈ $26,629, so the payout factor is about 8.9% of the premium each year. Total income over 15 years is $2,219.06 × 180 = $399,431 — the premium plus $99,431 of interest.
How the payout factor moves with the term
For a fixed premium, the shorter the income period, the larger each immediate payment — and the higher the annual payout factor. The table below shows the monthly income and approximate payout factor per $100,000 of premium at a 4% rate across several terms.
| Income period | Monthly income per $100k | Approx. annual payout factor |
|---|---|---|
| 10 years | $1,012.45 | 12.1% |
| 15 years | $739.69 | 8.9% |
| 20 years | $605.98 | 7.3% |
| 25 years | $527.84 | 6.3% |
| 30 years | $477.42 | 5.7% |
Figures use the same payout formula as the calculator, 4% rate. Multiply by your premium in hundred-thousands. Life-only SPIAs price by life expectancy, not a set term, so their factors differ.
When an immediate annuity makes sense
- Good fit: a new retiree who wants to cover essential expenses with guaranteed income and stop worrying about market timing.
- Good fit: someone who fears outliving their savings — a life-only SPIA transfers longevity risk to the insurer.
- Reconsider: anyone who may need the lump sum back. Once you buy a SPIA, the premium is generally gone — it is illiquid by design.
- Reconsider: a buyer with a strong legacy goal. A pure life annuity may leave nothing to heirs unless you add a refund or period-certain feature, which lowers the income.
Common immediate annuity mistakes
- Annuitizing everything. A SPIA is illiquid; keep a separate emergency fund and only annuitize the slice you need for guaranteed income.
- Skipping inflation protection. A level SPIA pays the same dollar amount for years. An inflation-adjusted SPIA starts lower but rises — weigh the trade-off.
- Not shopping carriers. Payout factors vary between insurers for the same premium; comparing quotes can add meaningfully to the monthly check.
- Ignoring the carrier's strength. A SPIA is a lifelong promise. Check the insurer's financial-strength rating and your state guaranty association limits.
Immediate annuity definitions
How accurate is this immediate annuity estimate?
This calculator solves a period-certain payout exactly, but a real SPIA quote depends on your age, sex, the chosen payout option (life, joint-life, period-certain, or refund), current carrier rates, and any inflation rider. A life-only quote in particular is priced from mortality tables, not a fixed term, so it can differ from the figure here.
Use the result as a planning estimate of immediate income from a lump sum — not a binding quote or financial advice. Request real SPIA illustrations from several insurers and compare the payout, the options, and each carrier's financial strength.
SEC Investor.gov — Annuities investor bulletin (immediate vs. deferred).NAIC — Buyer's Guide to Annuities.Frequently asked questions about the free immediate annuity calculator
About this Immediate annuity calculator
This immediate annuity calculator runs entirely in your browser — nothing you enter is stored or sent anywhere. It models a single premium immediate annuity (SPIA): a lump sum converted to level income that begins right away, using the period-certain payout formula (monthly = premium × r ÷ (1 − (1 + r)^−n)). It is a planning estimate, not a binding quote or financial advice; a real life-only SPIA is priced from mortality tables rather than a fixed term.
It is one of our free insurance calculators. For the growth-first alternatives, compare the fixed annuity and variable annuity calculators, or browse the complete calculators directory.