Preparing for retirement can be pretty tough in today's economic climate. With higher-than-ideal inflation continuing to impact everything from groceries to healthcare costs, and Social Security benefits often falling short of covering all living expenses, retirees typically need to find additional income sources they can count on month after month. And, recent issues with market turmoil have only added to the planning challenges that retirees and soon-to-be retirees are facing. 

As a result, more people are turning to annuities to help round out their retirement strategies. These unique insurance products offer a reliable way to turn a lump sum of savings into consistent monthly payments for life, so they can be an effective way to fill in the gaps left behind by traditional savings and investments. But when it comes to annuities, size isn't everything. Even a relatively modest annuity amount, like $50,000, can have a big impact, but knowing what to expect from that investment is key.

So, how much does a $50,000 annuity pay each month? The answer to that question — and what factors could influence the monthly payments — is one every potential buyer should know before deciding whether an annuity is right for them.

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How much will a $50,000 annuity pay monthly if bought at age 65?

If you're considering putting $50,000 into an annuity, you're probably wondering what kind of monthly income you could expect in return. That answer varies because the payouts can differ quite a bit based on a range of personal and economic factors. Still, there are ballpark figures you should know before buying in.

For example, if you're a 65-year-old man buying a $50,000 immediate fixed annuity today, you can expect to receive about $325 per month for life, by Annuity.org. A 65-year-old woman purchasing the same annuity in the same amount would get around $313 per month, while a $50,000 joint life annuity — which continues to pay a surviving spouse — might pay about $284 per month if purchased at age 65.

But while these figures offer a baseline, your payout could vary due to several important factors, including:

Your age at the time of purchase: The older you are when you buy the annuity, the higher your monthly payments typically are. That's because when you buy an annuity at an older age, the provider expects to make payments for fewer years, so they can afford to offer more per month. That's why a 70-year-old gets slightly higher payouts than a 65-year-old, all else being equal.

Your gender: Women tend to live longer than men, statistically speaking. As a result, annuity payments for women are usually a bit lower because the insurance company expects to make payments over a longer period. This helps explain the difference between the $325 monthly payout for a 65-year-old man and the $313 figure for a 65-year-old woman.

The annuity type: The type of annuity also plays a role. A joint life annuity, for example, offers lower monthly payments because it covers two lifespans, ensuring continued income even after one spouse passes away. That added security comes at the cost of reduced monthly income. You might also encounter options like period-certain annuities or inflation-adjusted annuities. While these can offer valuable features, they usually result in lower starting payouts compared to plain immediate annuities.

Interest rates and the economic environment: Annuity providers invest your money in fixed-income assets like bonds, so the more interest those investments earn, the more income they can pass along to you. Right now, higher interest rates are helping boost annuity payouts compared to previous years, but that could shift if rates decline.

Optional features and riders: Some annuities come with additional features, like return-of-premium guarantees or death benefits, that can reduce your monthly income. These features may be worth the tradeoff, but it's important to understand how they affect your overall payout.

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How to decide if a $50,000 annuity makes sense for you

Deciding whether to purchase a $50,000 annuity at age 65 isn't just about the monthly payment amount. It's also about how an annuity fits into your broader retirement strategy.

An annuity typically makes the most sense if you prioritize guaranteed income over potential growth. If you're concerned about outliving your savings or want a predictable income stream that supplements Social Security, the security of guaranteed monthly payments can provide invaluable peace of mind. This is especially true if you're in good health and expect to live well into your 80s or beyond.

However, annuities also come with trade-offs. Once you purchase an immediate annuity, you typically can't access your principal if you need a large sum for emergencies or unexpected expenses. This lack of liquidity means you should only use money you won't need for other purposes.

You should consider the opportunity cost as well. If you're comfortable with some investment risk and believe your $50,000 could grow significantly in the market over time, you might generate more total wealth through other investments. However, market investments don't guarantee returns, while annuities provide certainty.

The bottom line

A $50,000 immediate fixed annuity bought at age 65 could pay between $284 and $325 per month, offering steady, guaranteed income for the rest of your life. But your actual payout depends on factors like your age, gender, the type of annuity you choose and the interest rate environment at the time of purchase. While the monthly income from this type of annuity might not be enough to fund your entire retirement, it can serve as a reliable cornerstone for your financial plan. And in today's uncertain economic climate, that kind of certainty has real value.