How Long Your Annuity Payments Last: Fixed, Variable, and Lifetime Options

How long an annuity lasts depends on the type you own

An annuity can last anywhere from a set number of years to the rest of your life — it depends on which payout option you chose when you bought it. Some annuities pay you for exactly 10 years, then stop. Others pay you monthly for as long as you live, even if you reach 100. A third type pays you for your lifetime and then continues paying your spouse or beneficiary after you die. The contract you signed with the insurance company spells out which one you have.

The length of your annuity payments is locked in at the time you purchase it. You cannot change it later without surrendering the contract, which often costs money. That is why understanding your payout option before you buy matters — you are making a choice that will shape your income for decades.

Key Takeaways

• A fixed-period annuity pays for a specific number of years (like 10 or 20), then payments stop completely.
• A lifetime annuity pays you every month for as long as you live, regardless of how long that is.
• A joint-and-survivor annuity continues paying your spouse or beneficiary after you die, lasting longer than your lifetime alone.
• Your payout option is chosen when you buy the annuity and cannot be changed without penalties or surrender charges.
• The longer the annuity is designed to last, the smaller your monthly payment will be.

Fixed-period annuities: payments for a set number of years

A fixed-period annuity (also called a term-certain annuity) pays you for a specific length of time — commonly 10, 15, 20, or 30 years — and then stops. If you die before the period ends, the remaining payments go to your beneficiary. If you outlive the period, the payments end and you receive nothing more from that annuity.

This type is useful if you need income for a defined stretch — for example, from age 65 to 85 — but do not need it beyond that. The monthly payment is higher than a lifetime annuity would be, because the insurance company knows exactly how long it will pay. The trade-off is that if you live longer than the period, you lose the income stream.

Some people buy multiple annuities with different time periods to cover different phases of retirement. For instance, you might buy one that lasts 10 years to cover early retirement expenses, then rely on Social Security and other sources later.

Lifetime annuities: payments for as long as you live

A lifetime annuity (or straight-life annuity) pays you a monthly amount for the rest of your life, no matter how long you live. If you reach 95, 105, or beyond, the payments continue. This type removes the risk that you will outlive your money from this particular income source.

The monthly payment is lower than a fixed-period annuity because the insurance company does not know when payments will end — they could last 20 years or 50 years. The company prices this uncertainty into the payment amount. If you die early, your beneficiary receives nothing; the remaining value stays with the insurance company. That is why some people find straight-life annuities unappealing — there is no inheritance component.

Lifetime annuities work well for people who are concerned about running out of money in old age and who do not have a strong need to leave money to heirs. They provide may provide income security for life.

Joint-and-survivor annuities: payments continue after you die

A joint-and-survivor annuity pays you during your lifetime and then continues paying your spouse or designated beneficiary after you die. The survivor usually receives either the full amount you were getting or a reduced percentage (commonly 50%, 75%, or 100%, depending on what you chose). Payments continue until the survivor dies.

This option costs more upfront because the insurance company is committing to a longer payout period. Your monthly payment will be lower than a straight-life annuity. You choose the survivor's benefit percentage when you buy the annuity — a higher survivor benefit means a lower payment to you now.

Joint-and-survivor annuities are common among married couples where one spouse has the annuity and wants to may support the other is protected after death. They are also used when someone wants to leave income to an adult child or other dependent.

Annuities with period-certain guarantees

Some lifetime annuities include a period-certain may provide, which means if you die within a set period (often 10 or 20 years), your beneficiary receives the remaining payments. For example, a "life with 10-year period certain" annuity pays you for life, but if you die in year 3, your beneficiary gets payments for the remaining 7 years.

This hybrid approach gives you lifetime income protection while also ensuring your beneficiary receives something if you die early. The monthly payment is lower than a straight-life annuity but higher than a fixed-period annuity of the same length. Period-certain guarantees are popular because they balance income security with legacy concerns.

The period-certain window does not extend your payments if you live past it — it only protects your beneficiary if you die during it. Once you pass the may provide period, you continue receiving payments for life with no further beneficiary protection.

What happens if you need to stop payments early

If you own an annuity and want to end it before the payout period is over, you have limited options. Most annuities charge a surrender charge if you withdraw money or cancel within a certain window (often 5 to 10 years from purchase). The charge is a percentage of the withdrawal amount and can be substantial — sometimes 5% to 10% or more.

Some annuities allow you to withdraw a small amount each year without penalty (often 10% of the contract value), but this does not stop the regular payments. If you stop taking payments, the contract typically ends and you forfeit future income. A few annuities offer a liquidity rider that lets you access more money without penalty, but this costs extra and reduces your monthly payment.

Before you buy an annuity, ask the seller about surrender charges and any withdrawal options. If you think you might need access to your money, a shorter-term annuity or one with a liquidity rider may suit you better than a long-term lifetime contract.

How your age and health affect how long payments last

The insurance company does not adjust your annuity length based on your health or life expectancy. A 65-year-old and an 85-year-old who buy the same lifetime annuity both receive payments for life — the older person straightforward has fewer years to collect. However, the 85-year-old will receive a higher monthly payment because the company expects to pay for fewer years.

If you have a serious health condition, you may be able to purchase an impaired-life annuity (sometimes called a rated annuity), which pays a higher monthly amount because your life expectancy is shorter. You will need to provide medical records or undergo a health evaluation. Not all insurance companies offer this option, and it is most common with when ready annuities.

Your age at the time you buy the annuity is the primary factor in determining your monthly payment amount. The younger you are, the lower your payment, because the company expects to pay for longer. This is why some people delay buying an annuity until later in retirement.

Frequently Asked Questions

Can I change my annuity payout option after I buy it?

No, the payout option is locked in when you purchase the annuity. Changing it requires surrendering the contract, which triggers surrender charges and may result in a loss of value. Some annuities allow you to exchange it for a different contract with a different payout option, but this is treated as a new purchase and may have tax consequences. Always confirm your payout choice before you sign.

What happens to my annuity if I die before the payout period ends?

It depends on your payout option. With a fixed-period annuity, your beneficiary receives the remaining payments. With a straight-life annuity, your beneficiary receives nothing — the remaining value stays with the insurance company. With a joint-and-survivor or period-certain annuity, your beneficiary receives payments according to the terms you chose. Check your contract to see what your beneficiary is may have access to to.

Is a lifetime annuity worth it if I might not live very long?

A lifetime annuity makes sense if you are concerned about outliving your savings, even if your health is uncertain. If you have a serious condition and a short life expectancy, an impaired-life annuity may offer a higher payment. If you are confident you will not live past a certain age, a fixed-period annuity might be more cost-effective. Discuss your situation with a financial advisor who can compare the options.

Do annuity payments stop if I move or travel?

No, annuity payments continue regardless of where you live or travel. The insurance company sends payments to your bank account or mailing address as long as you are alive. You do not need to do anything special if you relocate. Some annuities require periodic proof of life (a signed form or notarized statement), but this is rare and usually only for very old annuitants.

Can I buy an annuity that pays for a specific amount of money rather than a specific time period?

No, annuities are structured around time periods or lifespans, not dollar amounts. You choose how long you want payments (10 years, lifetime, etc.), and the insurance company calculates the monthly amount based on your age, the interest rate, and how long they expect to pay. If you want to receive a specific total dollar amount, you would need a different financial product, not an annuity.