How Much Will My IRA Pay Me Per Month?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Financial Advisor’s 4% Rule

Financial advisors often recommend the 4% rule for annual withdrawals from your IRA. This method suggests withdrawing 4% of your IRA balance annually and adjusting for inflation each year. This conservative approach aims to ensure your retirement savings last throughout your lifetime. To calculate your monthly income:

  1. Determine your annual withdrawal: Multiply your IRA balance by 0.04.
  2. Divide by 12: Divide the annual amount by 12 to find your monthly payment.

For example, if your IRA balance is $500,000:

  • Annual withdrawal: $500,000 x 0.04 = $20,000
  • Monthly income: $20,000 ÷ 12 = $1,667

Annuities with Guaranteed Lifetime Withdrawal Benefits

An alternative to the 4% rule is using a Guaranteed Lifetime Withdrawal Benefit (GLWB) on an annuity. Annuities can provide a higher payout, typically between 5% to 7% annually, and can also be adjusted for inflation. This option offers a reliable income stream that can be higher than traditional methods. To calculate your monthly income:

  1. Determine your annual withdrawal: Multiply your IRA balance by the annuity payout rate (e.g., 0.05 to 0.07).
  2. Divide by 12: Divide the annual amount by 12 to find your monthly payment.

For example, if your IRA balance is $500,000 and the annuity payout rate is 6%:

  • Annual withdrawal: $500,000 x 0.06 = $30,000
  • Monthly income: $30,000 ÷ 12 = $2,500

Traditional IRA Monthly Payout Using Annuities

To determine how much income your IRA will pay you now or in the future, use this payout calculator to get accurate annual amounts updated in real time.

How This IRA Monthly Payout Calculator Works

This calculator uses annuities to calculate how much monthly income you can receive from your IRA. These are actual numbers and not estimates. We use annuities to determine the payout because they contractually guarantee payment for the rest of your lifetime, and any remaining balance will be passed down to your beneficiaries, relieving the stress of worrying about running out of money.

This method usually pays you a higher monthly payout than traditional distribution methods.

And don’t worry; there are no tax consequences for transferring to an IRA annuity.

Take These Steps

  1. Enter your age.
  2. Input your resident state.
  3. Input your current IRA balance,
  4. When would you like to collect your IRA payout (Start My Benefits)?

Benefits of Annuities

  • Higher Payouts: Annuities often provide higher payouts compared to the 4% rule.
  • Guaranteed Income: Annuities offer contractually guaranteed payments for life.
  • Inflation Adjustment: Some annuities adjust payouts for inflation, protecting your purchasing power.
  • Beneficiary Protection: Remaining annuity balances can be passed to beneficiaries, avoiding tax consequences for transferring to an IRA annuity.
How Much Will My Ira Pay Me Per Month?

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Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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