Displaying items by tag: index 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. 

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.

With more retirees seeking financial security, index annuities have gained popularity in 2025 for their mix of protection and growth potential. Index Annuities shield savings from market downturns while allowing interest accumulation when markets rise, making them a safer alternative to traditional investments. 

They also offer guaranteed lifetime income, ensuring retirees don’t outlive their savings, a critical feature as life expectancy increases. Rising interest rates have further enhanced index annuities appeal, as new contracts now offer better returns compared to bonds. 

Additionally, their tax advantages, including tax-deferred growth and flexible withdrawals, help retirees manage their financial burden efficiently. 

Given these benefits, index annuities are becoming a key component of retirement planning in an uncertain economic climate.

A surge in annuity sales over the past few years has been driven by retiring baby boomers and elevated interest rates, with total sales surpassing $1.1 trillion between 2022 and 2024. Fixed annuities, which function similarly to certificates of deposit but typically offer higher returns, have been particularly popular, with some rates reaching 5.85% in early 2025. 

However, as interest rates begin to decline, the appeal of these straightforward products may diminish, prompting investors to explore alternatives like fixed-index annuities. These annuities link returns to market performance while guaranteeing principal protection, making them an attractive option in uncertain economic conditions. 

Despite their benefits, fixed-index annuities come with complexities, including caps on returns and intricate contract terms that require careful scrutiny. As the market evolves, investors should prioritize transparency and fully understand their options before committing to an annuity in 2025.

Finsum: With the potential of interest rates staying flat we could see more investment in index annuities in 2025. 

Annuities offer a dependable source of income in retirement, primarily provided by life insurance companies. With various annuity products available, the challenge is identifying the most reputable providers that align with your retirement needs. 

Bankrate guides this process by evaluating companies on customer satisfaction, financial strength, product diversity, and other key criteria. Their analysis includes top providers like Allianz Life, known for its wide selection of fixed index annuities, and Prudential, offering diverse annuity types with flexible options. 

Pacific Life, another strong contender, stands out for its financial stability and customer service, despite higher minimum premiums. Choosing the right annuity provider involves weighing factors like fees, accessibility, and product offerings to match individual retirement goals.

Finsum: Index annuities are an increasingly important vehicle for those nearing retirement as inflation has been such an important investment factor in recent years.