How long an annuity lasts depends on the payout option written into the contract: a period certain option pays for a set number of years (commonly 10, 15, or 20), while a lifetime option keeps paying as long as you — or you and a surviving spouse — are alive. If you bought a deferred contract, add the years of growth before payments even begin. Some annuities end the day the last scheduled check clears. Others pay for 40 years and still owe a beneficiary money at the end.
The duration question really has two halves: how long your money can sit growing inside the contract, and how long payments continue once they start. The answers come from different parts of the contract and different parts of federal law.
How Long the Growth Phase Can Last
An immediate annuity skips this phase entirely. You hand over a lump sum, and the insurance company starts sending payments within about 30 days. The whole lifespan of the contract is just the payout option you picked.
A deferred annuity is different. Your money grows through interest, market gains, or both, and federal tax law lets those earnings compound tax-deferred inside the contract until you take money out.1Office of the Law Revision Counsel. 26 U.S. Code 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts If you bought the contract early in your career, that accumulation phase can run for decades. If you bought it close to retirement, it may be short.
Two things can cut the growth phase short at a cost. First, if you pull earnings out of the contract before age 59½, the IRS adds a 10% penalty on top of regular income tax.2Internal Revenue Service. Topic No. 557, Additional Tax on Early Distributions From Traditional and Roth IRAs A few exceptions apply, including distributions after disability, payments structured as substantially equal periodic payments over your life expectancy, and payouts from an immediate annuity.3Office of the Law Revision Counsel. 26 U.S. Code 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts – Section: (q)(2)
Second, most deferred annuities lock up your money for a surrender period of roughly six to ten years, with some contracts running as short as three or as long as ten. A typical schedule starts at 7% in year one and drops a point each year until it hits zero in year eight. Many contracts let you withdraw up to 10% of the account value each year without triggering the charge. Adding a new premium to the contract can start a new surrender period on that money.4Investor.gov. Surrender Charge
Some fixed annuities also include a market value adjustment. Surrender early when interest rates have risen since you bought the contract, and the insurer can reduce your payout on top of the surrender charge.5Investor.gov. Market Value Adjustment (MVA) Annuity
If you change your mind right after buying, every state gives you a free-look period of at least 10 days to cancel the contract and get your money back without a surrender charge.6Investor.gov. Variable Annuities – Free Look Period If you want to move to a different annuity later, a Section 1035 exchange lets you swap contracts without recognizing a taxable gain, but a new surrender period typically starts on the replacement contract.7Internal Revenue Service. Notice 2003-51, Section 1035 Exchanges
Lifetime Payouts: Payments Until You Die
Lifetime payout options guarantee income for as long as the annuitant is alive. The insurance company carries the risk that you’ll live longer than expected, even if your total payments ultimately exceed what you paid in.
Single Life
Under a single life payout, the insurer pays you a fixed amount at regular intervals for the rest of your life, and payments end at your death.8Internal Revenue Service. Publication 575, Pension and Annuity Income – Section: Types of Pensions and Annuities Because the insurer only has to plan for one lifespan, single life produces the highest monthly payment of any lifetime option. Nothing passes to a spouse or other beneficiary unless you add a rider.
Joint-and-Survivor
A joint-and-survivor payout continues income for two people, typically spouses. After the first dies, the survivor keeps receiving payments for the rest of their life, at a percentage of the original amount:
- A 100% survivor benefit continues the full payment.
- A 75% survivor benefit continues three-quarters.
- A 50% survivor benefit continues half.
Higher survivor percentages mean lower payments while both are alive, because the insurer has to plan for two 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.9Office of the Law Revision Counsel. 29 U.S.C. 1055 – Requirement of Joint and Survivor Annuity and Preretirement Survivor Annuity A married participant who wants a different payout usually needs written consent from both spouses. Non-qualified annuities you buy on your own don’t carry that requirement, though the option itself is widely available.
Life With Period Certain
This combines lifetime income with a guaranteed minimum duration. A “lifetime income with 10 years certain” option pays you for life, but if you die inside the 10-year window, your beneficiary collects the remaining payments until the guaranteed period ends. Live longer than 10 years, and payments simply continue for your lifetime with nothing left for a beneficiary.
Period Certain Payouts: A Fixed Number of Years
A period certain payout lasts for a specific number of years, not a lifetime. Common terms are 10, 15, or 20 years. The insurer calculates a fixed payment at the start, and you receive it every month until the term expires. A 20-year payout is exactly 240 monthly payments.
Payments continue even if you die during the term. If you pass away in year 8 of a 20-year schedule, your beneficiary (or your estate) collects the remaining 12 years. Once the final scheduled payment goes out, the contract ends with no residual value.
This structure works well for coordinating annuity income with a time-limited need, like covering the years between early retirement and when Social Security starts, or matching a mortgage payoff. The trade-off is clear: payments stop at the end of the term whether you’re still alive or not, so a period certain annuity doesn’t protect against outliving your money the way a lifetime option does.
Refund Provisions and What Happens at Death
Several features can extend the contract past the owner’s lifetime, independent of the payout option.
A cash refund provision pays your beneficiary a lump sum equal to any difference between what you invested and what you’d received in payments as of your death. An installment refund does the same thing, but as continued periodic payments rather than a lump sum. Either way, the insurer doesn’t keep money you never received.
When the original owner dies before annuitizing, the beneficiary generally has choices: take a lump sum (which triggers immediate income tax on the entire taxable portion), continue payments on a fixed schedule, or in some cases elect a lifetime payout of their own. A surviving spouse can often continue the contract in their own name instead of taking a distribution.
The 10-Year Rule for Inherited Retirement Accounts
If the annuity sits inside a qualified retirement account (an IRA or 401(k), for example) and the owner died after 2019, the SECURE Act changed the beneficiary timeline. Most non-spouse beneficiaries must now withdraw all remaining assets within 10 years of the owner’s death.10Internal Revenue Service. Retirement Topics – Beneficiary Exceptions apply to a surviving spouse, a minor child of the account holder, a disabled or chronically ill person, and a beneficiary who is no more than 10 years younger than the deceased owner. These eligible designated beneficiaries can still stretch distributions over their own life expectancy.11Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs The 10-year rule doesn’t apply to non-qualified annuities bought with after-tax dollars outside a retirement account; those follow the contract and state law.
When the Government Forces Payments to Start
If your annuity is held inside a qualified retirement account (a traditional IRA, SEP IRA, SIMPLE IRA, or 401(k)), you can’t defer forever. Required minimum distributions must begin by April 1 of the year after you turn 73.11Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs Under SECURE Act 2.0, that age rises to 75 on January 1, 2033.
If you’ve already annuitized, the periodic payments usually satisfy the RMD on their own. If the annuity is still in the accumulation phase, you have to calculate and withdraw the minimum each year or face a penalty.
Non-qualified annuities bought with after-tax dollars outside a retirement account are not subject to RMDs at any age. Money can keep growing inside the contract indefinitely, which is one reason non-qualified contracts can outlast their qualified counterparts.
Pushing Lifetime Payments to Age 85
A qualifying longevity annuity contract (QLAC) is a deferred annuity designed to start payments late, typically at age 80 or 85. The amount you use to buy a QLAC is excluded from RMD calculations until payments begin, so more of your retirement money stays invested longer. For 2026, you can use up to $210,000 of qualified retirement savings to buy one.12Internal Revenue Service. 2026 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living
Put it all together and the realistic range is wide. A 10-year period certain contract bought at retirement lasts exactly a decade. A deferred annuity bought at 40 with a lifetime payout and a 100% survivor benefit could easily run 50 years or more before the last check clears. The payout option you select is doing most of the work; everything else — surrender periods, RMDs, death benefits, QLAC rules — adjusts the edges.