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As retirement approaches, many Americans find that traditional savings strategies may not be enough to keep up with today's financial realities. From to the on groceries, housing and healthcare, it's getting harder to stretch every dollar in the current economic landscape, and that's especially true for those who are no longer earning a paycheck. That's why more retirees are looking beyond the usual investment accounts and turning to income solutions, , that offer stability, not speculation.
recently for their ability to deliver guaranteed monthly payments, no matter what's happening in the market. While these retirement tools aren't a solution for every senior or retiree's needs, they can serve as a valuable source of guaranteed income . And, with interest rates still elevated, there may be no better time to consider locking in a stable return, as the amount of your monthly annuity payment can be greater in a high-rate environment.
But if you're sitting on a large chunk of retirement savings — let's say $300,000 — you may be wondering in annuity form. So, how much monthly income could a $300,000 annuity really provide? Let's take a closer look at the numbers and explore whether this type of investment is worth considering.
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A $300,000 annuity can provide a meaningful stream of monthly income, especially for older retirees. According to (based on an analysis of Cannex data), here's what you could expect from an immediate fixed annuity purchased with $300,000, depending on your age and gender:
So, why do the payouts increase with age? It's simple: The older you are when you buy the annuity, the fewer monthly payments the insurance company expects to make over your lifetime, so the monthly amount goes up. Gender also matters. Because women tend to live longer than men, their monthly payments are generally lower than men's when all else is equal.
Keep in mind, though, that these figures reflect immediate fixed annuities, which start paying right away and offer a level payout for life. If you choose a joint life annuity, which continues payments to a surviving spouse, the monthly income will be lower. Likewise, if you opt for another type of annuity or features like inflation protection, you can expect the payments to differ from what's outlined above.
can also play a role in what your monthly annuity payments are. For example, a higher-rate environment will lead to larger monthly payments, but if the rate environment drops, your monthly payment will be lower.
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generally depends on your financial goals, risk tolerance and other sources of retirement income. So, you'll need to weigh all the factors that could impact you before making a decision. Still, there are some compelling reasons to consider using a portion of your savings to purchase one, including:
That said, annuities are not liquid. Once you hand over that $300,000, the money is no longer easily accessible. That makes it critical to avoid investing all your savings into one account. Annuities work best when they're part of , with some funds kept in liquid accounts for emergencies and flexibility.
Taxes also play a role. If your annuity is funded with pre-tax dollars, like from a traditional individual retirement account (IRA), your monthly payments will be taxed as ordinary income. If it's funded with after-tax dollars, only the earnings portion will be taxable.
A $300,000 annuity can generate a solid amount of monthly income — anywhere from roughly $1,700 to over $3,000 depending on your age and contract terms. That level of predictability can make a big difference in retirement, helping cover fixed costs or supporting a more comfortable lifestyle.
Still, it's important to weigh the pros and cons before committing. Annuities offer unique benefits like guaranteed income and protection against outliving your savings, but they also come with limited flexibility and potential tax implications. For many, the right move is to use annuities to complement Social Security and other savings or retirement income streams, not replace them.
And, as with any financial product, it pays to shop around and read the fine print before locking in a contract. But for those seeking steady retirement income in a turbulent world, a $300,000 annuity may be a smart part of the plan.
