Last updated: April 2026 | By Elizabeth Prescott
- A Single Premium Immediate Annuity (SPIA) converts a one-time lump sum into guaranteed monthly income that begins within 12 months and continues for life or a fixed period.
- SPIA payouts depend on age, gender (in non-unisex states), interest rates, payout option, and whether the contract is single-life or joint-life.
- For a 65-year-old male in April 2026, a $100,000 SPIA from an A-rated carrier pays approximately $680 to $720 per month for life.
- SPIAs are irrevocable once issued. The cash is gone; only the income stream remains.
- Best uses: filling an income gap, replacing a pension, building a guaranteed retirement income floor.
A Single Premium Immediate Annuity (SPIA) is the simplest type of annuity. You give an insurance company a lump sum today, and the company writes you a monthly check for the rest of your life – or for a fixed number of years – starting immediately. There is no accumulation phase, no market exposure, and no rider math. Just a payment that arrives on the same day every month until the contract ends.
SPIAs are also called “income annuities,” “immediate annuities,” or “lifetime payout annuities.” They are the closest modern product to an old-fashioned defined-benefit pension. For retirees who want the certainty of a paycheck and don’t need access to the principal, a SPIA can do something no other retirement product does: guarantee an income that cannot be outlived, regardless of how long you live or how markets perform.
How a SPIA Works
The mechanics are straightforward:
- You make a single premium payment – usually $50,000 to $1,000,000 – to an A-rated insurance company.
- You select a payout option (life only, life with period certain, joint life, etc.).
- You select an income start date, generally 1 to 12 months from issue.
- The insurer issues a contract guaranteeing fixed monthly payments per the payout option.
- Payments begin and continue for the contract term, deposited directly to your bank account.
Once the contract is issued, the decision is irrevocable. You cannot cancel the contract, withdraw the principal, or change beneficiaries on most life-only contracts. That irreversibility is the trade-off you accept for the income guarantee.
What Determines Your SPIA Payout
Five factors drive the monthly payment:
- Your age at purchase. Older buyers receive higher monthly payments because the insurer expects to make fewer total payments.
- Gender (in some states). Women have longer life expectancy and receive smaller monthly payments than men of the same age in non-unisex states. Some states require unisex pricing.
- Current interest rates. SPIA rates track the 10-year Treasury and corporate bond market. Higher rates mean higher payouts.
- Payout option selected. A life-only payout pays the most; adding a period-certain or refund feature lowers the monthly amount.
- Single life vs. joint life. Joint-life contracts pay less per month because they last as long as either spouse is alive.
SPIA Payout Options Explained
Life Only (Straight Life)
Pays the highest monthly amount. Income continues only while the annuitant is alive. When the annuitant dies, payments stop – even if death occurs the day after issue. No money goes to heirs. This is the maximum-income option for retirees with no spouse, no dependents, and no estate concerns.
Life with Period Certain
Pays for life, with a guarantee that payments will continue for at least a fixed period (commonly 5, 10, 15, or 20 years) even if the annuitant dies. If the annuitant dies before the period ends, remaining payments go to the named beneficiary. Lowers the monthly payment by 5-15% compared to life-only depending on the period chosen.
Joint and Survivor Life
Pays for as long as either of two annuitants (typically spouses) is alive. Payouts can be 100%, 75%, 66%, or 50% to the survivor. Lower monthly payment than single-life because the insurer is on the hook longer. The right choice for couples relying on the income.
Cash Refund / Installment Refund
Pays for life with a guarantee that total payments will be at least equal to the original premium. If the annuitant dies before recovering the premium, the balance goes to a beneficiary as a lump sum (cash refund) or continued installments (installment refund).
Period Certain Only
Pays for a fixed term (e.g., 10 years) with no life contingency. If the annuitant dies during the period, remaining payments go to the beneficiary. Functions like an amortization schedule, not insurance against longevity.
SPIA Sample Payouts (April 2026)
Approximate monthly payments per $100,000 of premium for a Life Only SPIA from an A-rated carrier:
| Age | Male | Female | Joint (Male/Female same age) |
|---|---|---|---|
| 60 | $580 | $555 | $510 |
| 65 | $695 | $655 | $595 |
| 70 | $840 | $785 | $705 |
| 75 | $1,025 | $960 | $845 |
| 80 | $1,290 | $1,200 | $1,030 |
These are illustrative averages. Actual quotes vary by carrier, state, and rate environment. For current quotes see our best SPIA rates page.
Who Should Buy a SPIA
SPIAs are not for everyone. They are well-suited to specific retiree situations:
Retirees Filling an Income Gap
If your guaranteed income from Social Security and any pensions falls short of your essential monthly expenses, a SPIA can close that gap with an income that will not run out. Many financial planners use this approach as part of a guaranteed income floor strategy. See our pillar on best annuities for retirement.
Retirees Without a Pension
For workers leaving employers without defined-benefit pensions, a SPIA effectively replicates a pension paycheck using IRA or 401(k) rollover money. The insurer becomes the pension administrator.
Single Retirees Concerned About Longevity
For an unmarried 75-year-old in good health, a life-only SPIA delivers payouts no other product can match. Sequence-of-returns risk and longevity risk are both eliminated for the portion of assets annuitized.
Surviving Spouses
A widow or widower who inherits a meaningful sum and needs to convert it to predictable monthly income often benefits from a SPIA, particularly with a period-certain or cash-refund feature to protect against early death.
Who Should NOT Buy a SPIA
- Retirees with limited liquid assets outside the SPIA premium. SPIAs are irrevocable. If the SPIA premium represents most of your liquid wealth, an emergency you can’t cover from elsewhere becomes a serious problem.
- Buyers who need flexibility. If you may need to access the principal, choose a deferred annuity or stay in invested accounts.
- Buyers prioritizing inheritance. Life-only SPIAs leave nothing to heirs. If legacy is important, use period-certain, cash-refund, or a different product entirely.
- Younger investors (under 60). The longer your projected payout horizon, the smaller each monthly payment. Most SPIAs make better economic sense at 65 and older.
- Buyers who can’t tolerate inflation risk. Standard SPIAs pay a level dollar amount that loses purchasing power over time. Inflation-adjusted SPIAs exist but pay much less initially.
SPIA Pros and Cons
Pros
- Guaranteed income that cannot be outlived (life options)
- Higher monthly income than systematic withdrawals from a similar bond portfolio
- No market risk, no sequence-of-returns risk
- Simple – no riders, no caps, no participation rates
- Favorable tax treatment via the exclusion ratio (a portion of each payment is non-taxable return of premium)
- Eliminates longevity risk for the annuitized portion of assets
Cons
- Irrevocable – principal is gone
- No flexibility once the contract is issued
- Most options leave nothing to heirs (unless you choose period-certain, refund, or joint-life)
- Inflation erodes purchasing power on level-payment contracts
- Carrier credit risk – protected by state guaranty associations up to coverage limits
- Lower internal rate of return than equity investments if the annuitant dies young
SPIA Tax Treatment
SPIA tax treatment depends on whether the premium came from qualified (pre-tax) or non-qualified (after-tax) money.
Non-Qualified SPIA (After-Tax Money)
Each monthly payment is split into a non-taxable return of premium and a taxable interest portion. The IRS calls this the exclusion ratio. For example, if the IRS-calculated exclusion ratio on your contract is 65%, then 65% of each monthly payment is tax-free and 35% is taxed as ordinary income. The exclusion ratio applies until the original premium is fully recovered, then the entire payment becomes taxable.
Qualified SPIA (IRA or 401(k) Rollover)
The full monthly payment is taxable as ordinary income, just like any other distribution from a pre-tax retirement account. There is no exclusion ratio because no after-tax money was contributed.
For deeper detail on annuity taxation, see how are annuities taxed.
SPIA vs. Other Annuity Types
| Feature | SPIA | MYGA | Fixed Indexed Annuity | Deferred Income (DIA) |
|---|---|---|---|---|
| Income starts | Within 12 months | At surrender / annuitization | At surrender / annuitization | Future date (2-40 yrs) |
| Principal access | None | Limited (10% free) | Limited (10% free) | None |
| Market upside | None | None | Capped/limited | None |
| Best for | Immediate income | Yield, flexibility | Growth + protection | Future income |
Compare options on what is a MYGA, what is a fixed index annuity, and deferred vs immediate annuity.
How to Buy a SPIA
- Determine your income need. Subtract guaranteed income (Social Security, pension) from essential expenses. The gap is your SPIA target.
- Choose your premium amount. Most planners recommend annuitizing 25-40% of retirement assets – not 100%.
- Select payout options. Single vs. joint, life-only vs. period-certain, level vs. inflation-adjusted.
- Get quotes from at least 3 A-rated carriers. Major SPIA issuers include New York Life, MassMutual, Mutual of Omaha, Pacific Life, Lincoln Financial, Penn Mutual, and Integrity Life.
- Verify financial strength. Confirm AM Best A or higher and check your state guaranty association coverage limit.
- Compare net monthly payment. Among carriers with similar ratings, the higher payout wins.
- Sign and fund. Wire or transfer the premium. The contract issues; income begins per the schedule.
Top SPIA Carriers in 2026
Several A-rated insurers compete for the SPIA market. Carriers most often quoted at the top of the rate sheet:
- New York Life (A++)
- MassMutual (A++)
- Mutual of Omaha (A+)
- Pacific Life (A+)
- Lincoln Financial (A+)
- Penn Mutual (A+)
- Integrity Life (Western & Southern, A+)
For a comparison of the largest fixed annuity carriers, see best fixed annuity companies of 2026.
Frequently Asked Questions
How much does a $100,000 SPIA pay per month?
For a 65-year-old male in April 2026, a $100,000 single-life immediate annuity pays approximately $680 to $720 per month for life from an A-rated carrier. A 65-year-old female receives about $640 to $680 per month. A joint-life contract paying 100% to the survivor pays roughly $580 to $620 per month.
Can I cash out a SPIA?
No. SPIAs are irrevocable once issued. You cannot withdraw the principal or cancel the contract. A small number of carriers offer “liquidity riders” that allow limited commuted-value withdrawals at a discount, but these are uncommon and reduce the monthly payment.
What happens to a SPIA when I die?
It depends on the payout option you chose. Life-only contracts stop paying at death with no remaining benefit to heirs. Period-certain, cash-refund, and installment-refund options pass remaining guaranteed payments to a named beneficiary. Joint-life contracts continue paying to the surviving spouse.
Are SPIAs a good deal in 2026?
SPIA payouts in April 2026 are higher than they were for most of the 2010s because the 10-year Treasury yield is in the 4.2-4.5% range. SPIA payouts track long Treasury and corporate bond yields, so today’s rates produce better monthly checks than the same purchase would have generated five years ago. Whether a SPIA is a good deal for you depends on your income gap, longevity expectations, and whether you have other liquid assets to handle emergencies.
What is the difference between a SPIA and a deferred annuity?
A SPIA pays income immediately – within 12 months of issue. A deferred annuity (such as a MYGA or fixed indexed annuity) accumulates value over a multi-year deferral period and is later either surrendered, annuitized, or rolled. SPIAs trade flexibility for guaranteed lifetime income; deferred annuities preserve flexibility but require a separate decision about how to convert to income later.
