How long an annuity lasts depends on the payout option written into the contract. Some annuities pay for a set number of years — commonly 10, 15, or 20. Others pay every month for the rest of your life, and can be structured to keep paying a spouse or beneficiary after you die. A deferred annuity also spends years growing before any payments begin, which extends the total life of the contract well beyond the payout phase itself.
What Actually Sets the Duration
Two things determine how long an annuity lasts: when payments start, and how the payout is structured.
An immediate annuity (a single premium immediate annuity, or SPIA) begins sending payments within about 30 days of purchase. You hand over a lump sum and income starts almost right away, so the contract’s total lifespan is defined entirely by the payout option you chose.
A deferred annuity has two stages. The accumulation phase is when your money grows, tax-deferred, inside the contract.1Office of the Law Revision Counsel. 26 U.S. Code 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts That stage can last decades if you bought the contract early in your career, or just a few years if you bought it near retirement. The payout phase starts when you annuitize or begin regular withdrawals, and its length is again controlled by the payout option.
So the practical answer to “how long will this pay?” comes from the payout election. Everything below walks through those choices.
Lifetime Payouts
A lifetime payout guarantees income for as long as the annuitant is alive. The insurance company carries the risk of a long life: payments keep coming even if the total sent to you exceeds what you originally paid in. Two structures do this work.
Single Life
Under a single life payout, the insurer pays you a fixed amount at regular intervals for the rest of your life. Payments stop at your death.2Internal Revenue Service. Publication 575, Pension and Annuity Income – Section: Types of Pensions and Annuities Because the insurer only has to plan around one lifespan, this option produces the highest monthly payment of any lifetime structure. Nothing passes to a spouse or beneficiary unless you add a rider.
Joint-and-Survivor
A joint-and-survivor payout continues income for two people, typically spouses. After the first person dies, the survivor keeps receiving payments for the rest of their life. The survivor’s benefit is set as a percentage of the original payment:
- 100% survivor benefit: the survivor keeps the full payment amount.
- 75% survivor benefit: the survivor receives three-quarters of the original payment.
- 50% survivor benefit: the survivor receives half of the original payment.
The higher the survivor percentage, the lower the monthly payment while both people are alive, because the insurer is planning for two potentially full lifespans.
Federal law requires employer-sponsored qualified retirement plans to offer a joint-and-survivor annuity — with a survivor benefit of at least 50% and no more than 100% — as the default payout for married participants. Choosing a different option generally requires written spousal consent.3Office of the Law Revision Counsel. 29 U.S.C. 1055 – Requirement of Joint and Survivor Annuity and Preretirement Survivor Annuity Non-qualified annuities bought outside a retirement plan don’t carry this requirement, but the joint option is still widely available.
Fixed-Term (Period Certain) Payouts
A period certain payout lasts a specific number of years rather than a lifetime. Common terms are 10, 15, and 20 years. The insurer calculates a fixed payment at the start, and you receive that same amount every month until the term ends. A 20-year payout means exactly 240 monthly payments.
Payments continue even if you die before the term is up. Die in year 8 of a 20-year contract and your named beneficiary (or your estate) collects the remaining 12 years of payments. Once the final scheduled payment goes out, the contract is over. There is no residual value.
Period certain works well when the goal is to bridge a defined stretch of time — the years between early retirement and Social Security, for example, or the remaining term on a mortgage. The trade-off is real: payments stop at the end of the term whether you’re alive or not, so a period certain annuity does not protect against outliving your savings the way a lifetime option does.
Options That Keep Paying After You Die
Several features extend a contract’s duration past the original annuitant’s life.
Life With Period Certain
This option combines lifetime income with a guaranteed minimum number of years. A “lifetime with 10 years certain” payout pays you for life; if you die inside the first 10 years, your beneficiary receives the remaining scheduled payments through the end of that period. Outlive the guaranteed years and payments simply continue for your lifetime, with no further beneficiary payout at death.
Cash and Installment Refund
Refund provisions make sure the insurer doesn’t keep money you never received. Under a cash refund, if you die before receiving payments equal to your original investment, the balance goes to your beneficiary as a lump sum. An installment refund pays that same remainder to your beneficiary as continued periodic payments. Either way, your total investment finds its way back to you or your heirs.
Beneficiary Choices If You Die Before Annuitizing
If the owner dies while the contract is still in the accumulation phase, the beneficiary typically has options: a lump sum (which triggers immediate income tax on the taxable portion), continued payments under a fixed schedule, or in some cases a lifetime payout of their own. A surviving spouse can often continue the contract in their own name instead of taking a distribution.
When Federal Rules Force the Timeline
For annuities held inside qualified retirement accounts, tax law can shorten how long the contract stays intact.
Required Minimum Distributions
If your annuity sits inside a traditional IRA, SEP IRA, SIMPLE IRA, or 401(k), you must begin required minimum distributions (RMDs) by April 1 of the year after you turn 73.4Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs Under SECURE Act 2.0, that age moves to 75 starting January 1, 2033.
If you’ve already annuitized, the periodic payments generally satisfy the RMD. If the contract is still in the accumulation phase, you have to calculate and withdraw the minimum each year or face a penalty. Non-qualified annuities, purchased with after-tax money outside a retirement account, have no RMD at any age. You can leave the money growing inside indefinitely, which makes these contracts capable of lasting longer than qualified ones.
A qualifying longevity annuity contract (QLAC) is a deferred annuity built to start paying late in life, typically at age 80 or 85. The amount used to buy the QLAC is excluded from RMD calculations until payments start, so more of your retirement savings stays invested longer.5Internal Revenue Service. 2026 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living
The 10-Year Rule for Inherited Annuities
For annuities held inside qualified retirement accounts where the owner died after 2019, most non-spouse beneficiaries must withdraw everything within 10 years of the owner’s death.6Internal Revenue Service. Retirement Topics – Beneficiary Certain “eligible designated beneficiaries” can still stretch distributions over their own life expectancy: a surviving spouse, a minor child of the account owner, a disabled or chronically ill individual, and any beneficiary who is no more than 10 years younger than the deceased owner.4Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs The 10-year rule does not apply to non-qualified annuities. Those follow the contract’s terms and state law.
Getting Out Early
Most deferred annuities lock up your money for a set number of years called the surrender period, typically six to ten years but sometimes as short as three.7Investor.gov. Surrender Charge Withdraw more than the contract allows during that window and you’ll pay a surrender charge, expressed as a percentage of the withdrawal that shrinks each year until it reaches zero. Many contracts include a free withdrawal provision letting you take up to 10% of the account value each year without a charge. Adding a new premium to the contract can start a fresh surrender period on that money.
Some fixed annuities also carry a market value adjustment. Surrender early and the insurer recalculates your payout based on current interest rates; if rates have risen since you bought the contract, that adjustment is often negative and can hit on top of the surrender charge.8Investor.gov. Market Value Adjustment (MVA) Annuity
Two escape hatches don’t cost you. A free-look period of at least 10 days after you receive the contract lets you cancel and get your money back without a surrender charge; the exact window varies by state.9Investor.gov. Variable Annuities – Free Look Period And a Section 1035 exchange lets you swap one annuity for another without recognizing taxable gain, as long as the same person remains the owner.10Internal Revenue Service. Notice 2003-51, Section 1035 Exchanges Just know that the replacement contract usually starts its own surrender period, so the clock on early-access costs resets.
Early withdrawal of earnings before age 59½ also triggers a 10% federal tax penalty on top of ordinary income tax, with limited exceptions for disability, substantially equal periodic payments over your life expectancy, and payouts from an immediate annuity.11Office of the Law Revision Counsel. 26 U.S. Code 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts – Section: (q)(2)
The takeaway on duration: an annuity lasts exactly as long as the payout option you pick says it will. A period certain contract ends on a calendar date. A single life contract ends when you die. A joint-and-survivor or life-with-period-certain contract can keep paying someone else after you’re gone. And on the front end, a deferred contract can quietly accumulate value for decades before any of that starts.