You can make an investment with more than 60 years that allows you receive more than $1,100 a month for life. That is the income that an investment of $250,000 can generate. In a context where Social Security is not enough to cover all retirement expenses, this type of fixed investment is a solid alternative for people who have saved and are looking for stability without depending on the market.
Why Social Security is no longer enough to retire
The average Social Security benefit in 2026 is $1,976 a month, $23,712 a year, according to the Social Security Administration (SSA). However, on average retirees need between $50,000 and $60,000 a year to cover their basic expenses, leaving a significant gap between income and cost of living (more than 50% of the required withdrawal expense)according to estimates by the SSA itself.
The gap that remains, between the amount provided by the government and the cost of living, is what people have to cover with their savings that depend on the market, in the best of cases, or go back to work.
Therefore, an investment that provides a fixed annuity helps in a very simple and safe way: a monthly check that does not fluctuate no matter what the stock market does and without you having to do anything else.
According to an analysis of CANNEX Monetary Exchanges As reported by CBS News, an immediate fixed annuity of $250,000 taken out at age 60 would generate the following monthly payments:
For a man:
- Unique life: $1,325 per month
- Life + 10 year warranty: $1,295 per month
- Life + 20 year warranty: $1,238 per month
- Joint life (same age): $1,205 per month
- Certain period of 20 years: $1,115 per month
For a woman:
- Unique life: $1,258 per month
- Life + 10 year warranty: $1,230 per month
- Life + 20 year warranty: $1,183 per month
- Joint life (same age): $1,138 per month
- Certain period of 20 years: $1,115 per month
The difference between men and women in the single modality of life is $67 dollars a monthequivalent to almost $800 dollars a year. This is because insurers adjust payments downward for women because they statistically live longer, and have to shell out a larger amount of payments.
What is the best option in this model when you have the money to invest?
The modality of unique life It pays more each month, but stops when the owner dies and there is nothing left for the heirs or spouse. The modality life + certain period ensures that if the owner dies before the term expires, payments continue to a designated beneficiary, even though the monthly amount is lower.
A third alternative is the option jointwhich extends coverage to the couple as long as one of them is still alive. Although it offers the lowest monthly payment, the insurer assumes greater longevity risk. For a Hispanic family where the surviving spouse depends on shared income, this can be the difference between stability and financial crisis in the last years of life.
Why buying at age 60 generates a lower monthly payment than at age 70
Buying an annuity at 60 means the insurer is obligated to make monthly payments for more years. If the same amount were invested at age 65 or 70, the monthly check would be noticeably higher, because the expected payback period is greatly reduced.
This means that those who have other income and can wait will receive a higher return for the same money. Anyone who needs guaranteed flow immediately, at 60, has this option available with real numbers.
Annuity yes, but not as the only solution
A $250,000 annuity generating $1,200 per month, added to the average Social Security benefit of $1,976, would give a combined income of approximately $3,176 dollars per monththat is to say, about $38,000 annually. However, it is still not enough: to cover the average retirement expense of $50,000 to $60,000 a yearthere are still between $12,000 and $22,000 dollars missing annual.
This calculation shows that an annuity is not the ultimate solution. Annuity.org notes that covering essential expenses with guaranteed income is the noxious strategy that financial advisors recommend, reserving the most liquid assets for unforeseen events and variable expenses.
Another drawback is the lack of liquidity: once you give your savings to the insurer, that money is no longer available for emergencies or inheritances, unless the contract explicitly contemplates it.
Frequently asked questions (FAQ) about retirement plans with fixed monthly payments
What is an immediate fixed annuity and how does it work?
It is a contract with an insurance company in which you give a lump sum (in this case $250,000) and the company pays you a fixed amount each month for life or for a certain period. It does not depend on the markets and the amount is set at the time of signing the contract.
Does an annuity affect my Social Security benefits?
No. Income from an annuity does not reduce or affect the amount of your Social Security benefits. Both can be received simultaneously without penalty.
Is it better to buy the annuity at 60 or wait until 65?
Waiting results in higher monthly payments for the same principal, because the insurer projects fewer years of payments. If you have other income, waiting may pay off more. If you need a guaranteed income immediately, 60 is a viable option.
What happens to the money if I die before recovering my investment?
It depends on the chosen modality. With single life, payments stop without refund. With a certain period or joint life, payments continue for one beneficiary until the term expires or the second owner dies.
How many companies should I consult before purchasing an annuity?
Experts recommend getting quotes from at least three different insurers and working with a financial advisor. Rates vary significantly between companies, and the monthly amount can change by several hundred dollars.
Conclusion
A fixed retirement annuity: It is a risk conversion tool. Anyone who reaches 60 with $250,000 saved and is concerned about maintaining a minimum level of income has a concrete and safe answer in this instrument.
The open question is whether the current interest rate environment will remain as favorable in the coming years. That window, based on data available in 2026, is still open.
Keep reading:
– You are overspending without realizing it: this is how you can save $300 a month without sacrificing your lifestyle
– Why the majority of Hispanics in the US fail to save and what you can do today
– If you lose your job tomorrow, this is the money you should have saved