If clients have been on the fence about buying annuities, the industry’s cheerleaders say that there’s no better time than now to enter the marketplace. In fact, they say, consumer interest in guaranteed retirement income solutions and sales of annuity products have hit record levels, thanks to several tailwinds such as high interest rates and strong equity markets.
According to LIMRA, the Windsor, Conn.-based insurance industry trade association, total annuity sales soared to $432.4 billion in 2024, a 12% year-over-year increase, and the first half of this year saw total annuity sales climb to a record $223 billion, a 3% year-over-year gain. LIMRA says annuity sales doubled between 2020 and 2024.
Keith Golembiewski, LIMRA’s director of annuity research, says: “It is a very interesting time.” He attributes annuities’ popularity to better technology, better access to the products, and more awareness of them at a time clients are trying to navigate uncertain waters.
Steve Gresham, founder and managing principal of consulting firm Next Chapter, says people overall are choosing to buy annuities because they want peace of mind. “Most retirees learn pretty quickly that ‘retirement income’ is a little more complex than the paycheck many of them received during their working careers,” he says, explaining that it is important that advisors manage investments to help clients meet expenses and liabilities. “Retirement is an income statement, so meeting expenses is a factor when considering income.”
There are a wide range of annuity products that provide financial security in retirement. Some offer not just income, but also income for life, which, as Gresham points out, “offsets the risk of living long.” They also provide a buffer for market volatility.
David Lau, CEO of DPL Financial Partners, a fast-growing Louisville, Ky.-based platform for commission-free annuities, says the lifetime income products are substitutes for classic pensions, something that many people in the private sector no longer have.