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Fixed Annuitization: Calculating Fixed Annuity Payments

Another aspect of the fixed annuity that is “fixed” is the amount of the benefit that will be paid out when the contract is annuitized. Fixed annuity payments are determined by insurance company annuity tables that give the first payment value per $1,000, which depends on:

  • The age of the annuitant,
  • The sex of the annuitant,
  • The payout options chosen, and
  • Deductions for expenses.

Thus, if an annuitant has $100,000 in his/her account, and the value is $5 per $1,000, then the first payment will be $500. For a fixed annuity, this will be the value of all subsequent payments. This would be true whether the insurance company’s investment returns are better or worse.

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