Displaying items by tag: index annuities

Sales of fee-based annuities are growing rapidly, reaching about $8 billion this year, though they still represent a small fraction of the $430 billion total annuity market. LIMRA projects $6.9 billion in fee-based variable annuities and $1.1 billion in fee-based fixed-indexed annuities for 2025, nearly doubling since 2022. 

Industry experts noted that while most sales still come from traditional 1035 exchanges, a rising share now involves new money, signaling growing advisor engagement. Insurers like Jackson National are developing fee-friendly products such as Jackson Income Assurance, which allows advisors to draw fees directly from contracts without reducing client benefits. 

Prudential Financial is also expanding in this space with ActiveIncome, an insurance overlay built for RIAs that preserves asset control while providing lifetime income. 

Finusm: These innovations aim to reduce friction between insurers and advisors, marking a structural shift toward fee-based, client-aligned annuity solutions.

Indexed annuities are becoming increasingly popular as retirement tools because they blend growth potential with protections not found in traditional fixed annuities. These products allow investors to defer taxes on gains until distributions begin, making them attractive for long-term retirement income strategies. 

Equity-indexed annuities (EIAs) and registered index-linked annuities (RILAs) tie returns to market indexes, with EIAs offering a guaranteed minimum return and RILAs providing downside buffers or floors to manage risk. However, features like caps, participation rates, and fees can limit upside potential, so retirees must carefully review contracts to understand how returns will be credited. 

Indexed annuities are designed for long-term holding, and early withdrawals can lead to surrender charges and tax penalties that erode principal. 

Finsum: For retirement savers, these products can serve as a middle ground between fixed and variable annuities, offering balance, income potential, and risk management over the long haul.

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.