Displaying items by tag: annuities

While overall annuity sales have cooled slightly from their post-pandemic highs, persistent economic unease may be fueling renewed demand. In Q1 2025, total annuity sales reached $105.4 billion—just 1% below the all-time high recorded in the same quarter last year, according to LIMRA. 

The organization attributes this strength to rising consumer anxiety, which in March drove sales to their second-highest monthly total on record. Registered index-linked annuities (RILAs) continued to shine, with sales up 21% year over year, bolstered by product innovation and growing interest from both insurers and investors. 

Meanwhile, fixed indexed annuities saw a 7% decline but still posted the fifth-highest quarterly sales ever at $26.7 billion. 

Finsum: For those looking for security with some upside in their retirement portfolios annuities products could provide an outlet. 

After years of prioritizing safety, retirement savers are once again embracing market risk, as sales of variable annuities tied to investment fund performance surged in late 2024. According to Wink’s latest data, traditional variable annuity sales climbed 53% year over year to $18 billion, outpacing every other annuity category tracked. 

Interest also rose in registered index-linked annuities, which mirror stock index performance, with sales growing 38% to $35 billion, while fixed indexed annuities grew by 22% to $32 billion. In contrast, demand dropped sharply for multi-year guaranteed annuities — down 45% to $29 billion — as fewer consumers sought fixed returns. 

This rebound in market-linked products reflects renewed investor optimism but also hints at insurer caution, with some reallocating capital toward products that require less financial backing. 

Finsum: Expiring surrender periods on older annuities may be freeing up funds for reinvestment, fueling the uptick in new variable annuity contracts.

Annuities are gaining popularity as a retirement income solution, especially after the SECURE Act 2.0 made it easier to include them in 401(k) plans. A LIMRA survey showed that 70% of non-retired workers would likely choose an in-plan annuity, attracted by the promise of guaranteed lifetime income. 

Reflecting this demand, annuity sales hit a record $432.4 billion in 2024, marking the third consecutive year of growth. Annuities can be a good choice if you're worried about running out of money, seeking better returns than bank CDs, or have maxed out other retirement accounts. 

Immediate and deferred annuities offer different ways to secure lifetime income, while fixed annuities provide guaranteed growth with higher yields than many traditional savings options. 

Finsum: Ultimately, whether an annuity fits your needs depends on your financial goals, risk tolerance, and desire for income stability in retirement.

A wave of fixed annuity contracts sold in 2020 with five-year surrender periods is maturing, potentially unleashing over $70 billion in investable assets. Many of these annuities, purchased at average rates around 2%, are now competing with products offering closer to 5%, giving investors a strong incentive to move their money. 

While some clients may shift to higher-yielding fixed annuities, the trend is expected to boost flows into less capital-intensive options like RILAs and fixed indexed annuities. Insurers with strong distribution networks and scalable, SEC-registered products could be best positioned to capture this movement. 

At the same time, many traditional fixed annuity issuers are stepping back due to capital constraints, relying more on reinsurers or exiting the market altogether. For advisors, the end of these surrender periods presents both a challenge and opportunity—clients may be targeted by competitors, but those assets can also be redirected into new, potentially more flexible portfolio strategies.

Finsum: Paying attention to these trends in annuities can give advisors a leg up on the competition.

In a high-inflation environment, variable annuities offer a unique blend of investment growth and guaranteed income, making them an attractive option for certain retirees. Unlike fixed annuities, their value rises and falls with market performance, allowing for inflation-beating potential over time. 

They also provide tax-deferred growth and the option to convert savings into a predictable income stream that can last for life. Optional riders can offer added benefits like long-term care coverage or income guarantees, though these come with additional fees. 

However, high costs, market risk, and limited liquidity make them unsuitable for all investors. 

Finsum: For those who’ve maxed out other retirement vehicles and can tolerate some risk, variable annuities may help protect purchasing power while delivering steady income.