The Big Annuity Breakthrough

Annuity sales surged to a record high in the third quarter, topping $120 billion for the first time, according to the Life Insurance Marketing and Research Association (LIMRA). Momentum shows no sign of slowing: total sales in 2025 are projected to exceed $450 billion and remain at or above that level through 2028. At the heart of this growth is a straightforward promise—income you can count on for life. As traditional pensions disappear and retirements stretch longer, the need for reliable, lifelong income is making annuities a vital part of today’s financial planning conversations.

Much has been writing about Americans’ fear of running out of money in retirement, and the concern is widespread. Even among those with 401(k)s, 84% worry about the impacts of today’s economic conditions, market volatility, and inflation. In response, 39% are buying less, 35% are settling for cheaper products, 36% are saving less overall.ⁱ

Annuities can help ease those anxieties.  In a recent survey, annuity owners reported greater peace of mind and lower financial stress. They worry less about:ⁱⁱ

     Running out of money in retirement, (97%)

     Covering day-to-day expenses, (93%)

     Experiencing market downturns. (88%)

As a record number of Americans reach retirement age—about 11,200 people are turning 65 every day through 2027ⁱⁱⁱ—it’s easy to see why economists project growing demand for annuities and the financial and psychological benefits they provide.  

Annuities’ Superpower is Guaranteed Lifetime Income

Annuities are products designed to provide income payments that are contractually guaranteed to continue as long as you live. For retirees, that matters. Instead of relying solely on market performance to generate income year after year, an annuity with an income benefit can take pressure off an investment portfolio. Like Social Security and a pension, annuity payments are secure and predictable, adding a measure of certainty—and peace of mind—to a retirement income plan.  

Leading retirement planning experts say annuities should be considered in retirement plans to help manage two of retirees’ biggest risks:

     Investment Uncertainty. Twenty-six percent of pre-retirees and retirees cite market volatility as a top financial concern.^iv Because market performance is unpredictable, it’s hard to know how investments will grow or how much income they’ll ultimately provide. Annuities can reduce that uncertainty by protecting principal and providing a guaranteed income stream, often used to cover essential expenses throughout retirement.

     Longevity Uncertainty. Only 27% of retirees feel very confident their savings will last their lifetime^v. With no way to know how long we’ll live, planning becomes especially challenging. Annuities help address this by providing income for life—much like a reliable retirement paycheck—which is why they’re often referred to as “personal pensions.”

These powerful benefits are driving greater interest in, and usage of, annuities among financial advisors. According to the 2025 Protected Retirement and Income Planning Study, half of advisors say they’re allocating more of their clients’ assets to annuities, making it the most popular shift in investment strategy.^vi

Learn more about how annuities protect against risks in retirement.

Understanding Modern Annuities

Traditional annuities often have high fees, including hefty commissions for the agents who sell them. These commissions sometimes have led to recommendations that weren’t in the buyer’s best interest, fueling a reputation for annuities as costly and untrustworthy.  

Today, “commission-free” annuities offer a compelling alternative. Like no-load mutual funds, they come with lower costs, greater transparency, and enhanced benefits—such as no surrender periods and potentially higher payout rates. Top insurance companies now offer a variety of commission-free annuities, giving buyers more choices and better value. DPL provides a marketplace of commission-free annuities for financial advisors and consumers, plus easy-to-use tools to compare product costs and features.  

Improving Your Existing Annuity

One of the popular ways to take advantage of commission-free annuities is to exchange a commissioned annuity you currently own for a commission-free alternative with lower costs and potentially improved benefits. Through a 1035 exchange—a tax-free transfer of an existing policy to a new policy—you may be able to better align the product’s benefits with your financial goals. DPL’s Annuity Comparison Calculator allows you to compare and evaluate products to find the annuity solution that best fits your needs.  

Compare an existing policy to commission-free options with DPL’s Annuity Comparison Calculator.

Trustworthy Financial Advice is Important

Annuities have become a vital part of the retirement planning process because many Americans want and need guaranteed income in retirement.^vii  

If an annuity could fit your retirement goals, consider consulting a fee-only financial advisor—one who charges a fee to provide financial advice, not commissions to sell products. Advisors who prioritize your preferences and goals can make a real difference in achieving a secure, confident retirement.

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Disclosures

i 2025 Workplace Survey 401(k) Plan Participants (Charles Schwab, 2025) <https://content.schwab.com/web/retail/public/about-schwab/schwab_2025_401k_participant_survey_findings.pdf>.

ii  BlackRock Retirement Perspectives, Annuity Owners Value the Benefits of Lifetime Income (2025) <https://www.blackrock.com/us/financial-professionals/retirement/insights/annuity-owners-value-lifetime-income-benefits>.

iii  Dan Doonan and Kelly Kenneally, Retirement Insecurity 2024: Americans’ Views of Retirement (National Institute on Retirement Security, 2024) <https://www.nirsonline.org/wp-content/uploads/2024/02/FINAL-2024-Public-Opinion-Research.pdf>.

iv  2025 Protected Retirement Income and Planning (PRIP) Study.

v  BlackRock Retirement Perspectives, Read on Retirement: A New Generation of Retirement Plan Consultants (2025) <https://www.blackrock.com/us/financial-professionals/literature/presentation/read-on-retirement-insight-report-core.pdf>.

vi  2025 Protected Retirement Income and Planning (PRIP) Study (2025) <https://www.protectedincome.org/alliance-research-prip-2025>.

vii  Doonan and Kenneally, Retirement Insecurity 2024: Americans’ Views of Retirement.