How Much Does a $300,000 Annuity Pay Per Month? 2025 Payout Examples and Calculator Tips

You want a clean number: what does a $300,000 annuity actually pay each month? Here’s the short answer-most 65-year-olds looking at a plain fixed immediate annuity today will see something in the $1,500-$1,900 per month range. Add a spouse, inflation bumps, or guarantees, and it shifts. Go older and it rises. Go term-certain and it can cross $2,000 depending on rates. The point is to pin your case to your age, options, and the current payout rate, then do the math without guesswork.

• TL;DR: A typical 65-year-old single-life fixed immediate annuity pays about $1,500-$1,900 per month on $300,000; joint-life is ~10-15% lower; 20-year term-certain lands ~$1,650-$2,050 depending on rates.
• What moves the needle: your age(s), interest rates, single vs joint, guarantees (period certain, cash refund), and inflation increases.
• Quick math: Monthly = Premium × Payout rate ÷ 12. At 6-7%, $300k throws off ~$1,500-$1,750 per month.
• To get a real quote: match options apples-to-apples, grab at least 3 carriers, and check insurer strength (AM Best or S&P).
• Heads-up: annuities trade liquidity for guaranteed income; payments are before tax and rules vary by country.

What a $300,000 annuity can pay each month (quick answers)

If you just want the number, start with the payout rate the insurer offers for your age and options. Payout rate is not the investment return; it blends interest and mortality credits (for lifetime annuities). In the 2024-2025 market, quotes for fixed immediate annuities at common retirement ages have often landed around 5.5%-8% depending on age and features-lower at 60, higher at 70-75. Use that band to get a fast estimate, then refine.

Rule of thumb I use with clients and in my own planning here in Brisbane: every five years older you are when income starts, the payout can jump roughly 10-20% (because expected payments are fewer). Adding a 100% survivor benefit for your spouse tends to shave ~10-15% off the monthly number. Inflation increases (like 2% COLA) usually cut the starting check by ~20-30%, but it grows each year.

Here are ballpark ranges for $300,000. These are estimates, not quotes. Payments shown are before tax.

Where do these ranges come from? They reflect typical immediate annuity quotes seen across major markets in 2024-2025 and basic amortisation math for term-certain income. Life annuity payouts depend on insurer pricing, interest rates, and mortality assumptions (e.g., Society of Actuaries tables and improvement scales). Term-certain payments are pure math: Payment = Principal × monthly rate ÷ (1 - (1+monthly rate)^{-months}).

To anchor your own expectation, here’s a quick mental model: take $300,000, multiply by a realistic payout rate for your age, then divide by 12. If an insurer shows 6.8% for a 65-year-old single-life, you’re in the $1,700/month zone. If you add a 100% survivor benefit for your spouse, trim roughly 10-15% off that starting number.

One more sanity check: the “rule of 240.” If you were to pay yourself back your own money over 20 years with no interest, $300,000 ÷ 240 = $1,250 per month. Any quote above that is coming from interest and (for lifetime annuities) mortality credits.

How to estimate your annuity payment (step-by-step)

Let’s turn your situation into a number you can trust. I’m a numbers-first guy raising a family in Brisbane, and the way I sanity-check retirement income is the same way I plan everything from school fees to the home loan: define the variables, run the math, then make the trade-offs explicit.

Start with this: $300,000 annuity monthly income is a product of five levers-age(s), type (life vs term), rate environment, guarantees, and inflation features. Here’s a plain-English path:

1. Pick your annuity type.
   • Fixed immediate annuity (lifetime). Pays a guaranteed amount as long as you (or you and your spouse) live.
   • Fixed term-certain. Pays for a set number of years (e.g., 10, 20), then stops.
   • Deferred income annuity. You pay now, income starts later (useful if you’re 50s planning for 60s).
   • Indexed/variable annuities with income riders. Can provide guaranteed income, but mechanics and fees are more complex-quote them, but compare the income guarantees, not marketing hype.
2. Set the lives covered.
   • Single-life. Highest payout, stops at your death (unless you add a period certain or refund).
   • Joint-life (e.g., 100% to spouse). Pays while either of you lives; expect ~10-15% lower starting income.
3. Choose options.
   • Period certain (e.g., 10 years). Guarantees payments for at least that long. Small reduction to starting payout.
   • Cash refund. Ensures your estate gets back unused principal. Slight reduction to payout.
   • Inflation increase (COLA). 1-3% annual increases. Starts lower, grows over time.
4. Pick a payout rate assumption to estimate.
   • At 65, try 6-7% for single-life level pay as a starting point.
   • At 70, try 7-8.5%.
   • At 75, try 8.5-10%.
5. Do the math. Monthly = $300,000 × payout rate ÷ 12. Then adjust for joint-life (-10-15%), period certain (-3-7%), or 2% COLA (-20-30% start).

Now let’s run a few clean examples so you can see the dials move.

• Example 1: Age 65, single-life, level. Assume 6.8% payout. Annual = 300,000 × 0.068 = $20,400. Monthly ≈ $1,700.
• Example 2: Age 65, joint-life 100% to spouse, level, with 10-year period certain. Start from 6.4% (lower for joint). Annual = 19,200. Monthly ≈ $1,600. Add 10-year certain (-3-5%) → around $1,520-$1,550.
• Example 3: Age 70, single-life with 2% COLA. Base level might be ~7.8% ($1,950/month). With 2% COLA, cut start ~25% → roughly $1,460/month, rising 2% each year.
• Example 4: Age 65, 20-year term-certain. At 5% interest, Payment ≈ $2,007/month. At 3% interest, ≈ $1,663/month. At 6%, ≈ $2,149/month.
• Example 5: Buy at 55, start at 65 (deferred life annuity). Insurer adds deferral credits. Quotes often land in the $1,850-$2,200/month zone depending on interest rates during the deferral period and the final age at start.

What about interest rates? For fixed immediate annuities, a 1 percentage point move in the underlying rate environment can shift payouts by roughly 7-12% for new buyers. That’s because the pricing leans heavily on bond yields. Life-only payouts also reflect mortality assumptions (e.g., SOA base tables with improvement scales). When rates rose in 2022-2024, payout offers improved; if rates fall again, expect the reverse.

Two quick filters to keep you from being misled by shiny brochures:

• Compare guaranteed income only. Ignore backtested “could-be” charts. If it’s an income rider, ask for the guaranteed lifetime withdrawal dollar amount, not just the rider’s phantom “benefit base.”
• Check insurer strength. Use AM Best, S&P, or a local prudential regulator’s data. I aim for A-/A or better for core income.

Personal note: When I ran this for my own household, I priced single-life for me, joint-life with my wife, and a 2% COLA version. I also ran a plain 20-year term-certain as a control. We didn’t buy yet-we’re not at that stage-but the exercise made our income floor obvious and helped us set a savings target without guesswork.

Choosing and using an annuity (trade-offs, pitfalls, next steps)

The job-to-be-done here isn’t just “what’s the number,” it’s “can this income solve my monthly bills without boxing me in.” Here’s how I’d approach it for a $300,000 chunk.

Decision checklist

• What gap are you solving? Add your expected pensions/super, withdrawals, and rental income. The annuity should fill a defined shortfall, not replace every dollar.
• How much flexibility do you need? Life annuities are sticky. Keep 6-12 months of expenses in cash and a liquid portfolio for one-off costs.
• Single vs joint? If your spouse depends on this income, a 100% survivor option is often worth the lower starting check.
• Inflation plan? COLA starts lower but keeps buying power. If you invest elsewhere for growth, a level annuity can still work.
• Guarantees and refunds. Period-certain or cash-refund protects against dying early. Expect a slight payout cut.
• Insurer strength. Prioritise well-capitalised carriers. Check AM Best or S&P ratings.
• Taxes. Pre-tax annuity payments are usually taxed as ordinary income. After-tax annuities often use an exclusion ratio (part principal, part interest). Rules vary by country; in Australia, lifetime income streams can get concessional treatment under the means test for the Age Pension-ask a licensed adviser.

Common pitfalls

• Buying on yield alone. A tiny bump in payout isn’t worth a weak insurer.
• Mixing apples and oranges. Always match quotes on age, single vs joint, period certain, COLA, and refund options.
• Over-allocating. Don’t annuitise money you’ll need for home repairs, medical gaps, or helping the kids. I keep that outside the annuity bucket.
• Indexed annuity confusion. The crediting strategy doesn’t drive the guaranteed check-your rider’s terms do. Get the guaranteed dollar amount in writing.
• Surrender periods. If you buy a deferred annuity before turning it into income, note surrender charges and market value adjustments.

Mini‑FAQ

Is the payout rate my investment return? No. The payout rate blends interest and, for lifetime annuities, mortality credits. Your “return” depends on how long you live.

What if I die early? Without a refund or period-certain feature, payments stop. Add a cash-refund or 10-year certain if that risk bothers you.

Can I change my mind? Lifetime annuitisation is usually irrevocable once income starts. Some riders offer commutation, but expect trade-offs.

Are payments inflation-proof? Only if you select a COLA. Level payments lose buying power over time.

What happens if the insurer fails? Look at the carrier’s financial strength and your country’s safety net framework. Diversifying across two insurers can reduce single-company risk.

How are payments taxed? Pre-tax money (like many pensions or retirement accounts) generally produces fully taxable income. After-tax annuities split payments into principal (untaxed) and interest (taxed). Confirm with a tax adviser in your jurisdiction.

Why are joint-life payouts lower? Because the insurer expects to pay longer-until the second person passes.

Do rates change after I buy? No. Once annuitised, your payout is locked by contract (except COLA increases if elected). Quotes for new buyers will move with markets.

Next steps (fast and clean)

1. Define the brief. Income start age, single vs joint, period certain or refund, COLA or level.
2. Get 3-5 comparable quotes. Use the same brief for each carrier. Ask for the guaranteed monthly dollar amount.
3. Check ratings. Aim for A-/A or better (AM Best/S&P). If you must go lower, diversify.
4. Stress test. Can your budget handle a 3% inflation world with a level check? If not, price the COLA.
5. Stage the purchase. Consider splitting the $300k into two tranches six to 12 months apart to smooth rate timing.

Troubleshooting by scenario

• I’m 60 and the payout looks small. Consider a deferred start (e.g., 65), or annuitise a smaller slice now and revisit later; payouts climb with age.
• I need $2,000/month at 65 but quotes say $1,600. Options: add a term-certain for 20 years instead of life-only (if longevity risk is less of a concern), push retirement back a year or two, or combine a smaller annuity with a bond ladder.
• I want inflation protection without a low start. Try a ladder: buy one level-pay annuity and one with COLA, or pair a level annuity with an equities sleeve meant to refill a “raise” every few years.
• My spouse’s security is the priority. Go joint 100% survivor and trim elsewhere. The peace of mind is usually worth the lower initial check.
• I’m not sure about taxes. Before you click buy, run the payment through a tax calculator or speak with a licensed tax adviser. Pre-tax vs after-tax funding changes what hits your bank after tax.

If you’ve read this far, you’ve got the key levers. Price your exact combo, sanity-check the quote against the ranges above, and only then decide how much of your $300,000 to annuitise. I do this for my own family-Elaine rolls her eyes when I pull out spreadsheets at dinner-but it beats guessing with the rent on the line. And if you’re like me, you’ll sleep better knowing the math is nailed down.