If you’re wondering what kind of monthly income an $850,000 annuity can provide, you’re in the right place.
Annuities can play a powerful role in your retirement portfolio—providing guaranteed income for life that the stock market simply can’t match.
Today, we’ll look at exactly how an $850,000 annuity performs—whether you start income immediately or defer it for a few years.
Need help choosing the best annuity for your unique situation? Have questions about getting an annuity? If so, it’s best to speak with an annuity specialist. Watch this short video to see how I can help you do this (at no cost to you!)
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Immediate Income: How Much You Get If You Start Now
Let’s start with an immediate income annuity—meaning you start taking payments right away.
For a married couple, the top current payout from Prudential provides about $55,000 per year for life from an $850,000 premium.
That’s roughly $4,580 per month, guaranteed as long as either spouse lives.
By the time one of you reaches age 95, you’ll have received over $2 million in lifetime income—even though you only invested $850,000.
If you’re single, the payout is even higher, since the insurance company only covers one life.
💡 Pro Tip: Single-life payouts are higher, but if you’re married, joint payouts ensure your spouse continues receiving income for life.
Deferred Income: How Waiting Increases Your Monthly Pay
Now let’s see how your payout grows if you wait to take income:
- Wait 2 years: Clear Spring offers about $66,387/year in lifetime income (~$5,532/month).
- Wait until age 65: Nationwide pays about $88,506/year (~$7,375/month).
- Wait until age 67: Income rises to $100,000/year (~$8,333/month).
- Wait until age 70: Top options can exceed $135,000/year (~$11,250/month).
So, by simply deferring a few years, you can nearly double your guaranteed income.
👉 Want to compare the highest payouts side-by-side? Use the annuity calculator to run your own scenario.
Why the “Income Rider” Option Is So Popular
For this example, we’re using a fixed index annuity with an income rider, since it typically pays the highest guaranteed lifetime income.
Here’s why many retirees prefer it:
- You can lock in guaranteed growth on your future income base (often 7–8% per year).
- It provides flexibility—you choose when to activate income.
- It’s contractually guaranteed, meaning your income is safe regardless of market conditions.
Yes, income riders come with fees, often around 1%–1.25% per year. But in exchange, you’re buying peace of mind and higher guaranteed income.
In this example, even after roughly $280,000 in lifetime rider fees, you’d still come out over $800,000 ahead compared to not using the rider.
Single vs. Joint Life: What’s Best for You?
If you choose a single-life annuity, you’ll get about $5,000 more per year in income than a joint contract.
However, if you pass away, your spouse receives nothing.
With a joint-life payout, the income continues for both lives—so even if you live to 85 and your spouse lives to 95, the payments keep coming.
👉 For married couples, I always recommend the joint option for lifetime security.
Fees, Surrender Periods, and Cash Value
Like most annuities, these contracts have a 10-year surrender schedule. That means if you take out your money early, you’ll pay a small surrender charge (starting around 9% and declining annually).
Your account balance may also decline over time—and that’s okay.
Remember, this product is designed for income, not asset preservation. You’re trading principal stability for maximum guaranteed lifetime cash flow.
What About MYGAs?
A MYGA (Multi-Year Guaranteed Annuity) works more like a CD—it provides a fixed interest rate for a set period, but it doesn’t offer lifetime income.
For example, an $850,000 MYGA earning around 5.5% might grow to about $1.45 million in 10 years, but when you convert that into lifetime income, it’s still lower than what an income rider would have produced.
MYGAs are great for shorter-term savings goals or for those who want interest-only withdrawals, not guaranteed lifetime payments.
Bridging the Income Gap Before Social Security
Many retirees use accelerated payout annuities to cover the years before Social Security starts.
For example, a contract might pay $110,000 per year for 10 years, then drop to $73,000 thereafter.
That’s ideal if you plan to retire early and need a “bridge” until your Social Security or pension kicks in.
💡 Pro Tip: If you want level lifetime income, avoid accelerated payout plans. If you want front-loaded income for early retirement years, they can be a smart fit.
The Bottom Line
If you invest $850,000 into an annuity, your monthly lifetime income can range from $4,500 to $11,000, depending on when you start, your age, and whether you’re single or married.
Here’s what to remember:
- Immediate payouts: Around $55,000/year
- 2-year deferral: Around $66,000/year
- Start at 65: Around $88,000/year
- Start at 70: Up to $135,000/year
Your personal results will vary—but that’s why I built calculators that show every available option side by side.
Conclusion
Annuities aren’t about chasing returns—they’re about guaranteeing income you can never outlive.
If you’re approaching retirement, or already there, now’s the time to find the right balance between growth and guarantees.
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