U.S. annuity gross sales hit $464.1 billion in 2025, the fourth straight 12 months of report gross sales. 2026 hasn’t slowed down. Gross sales topped $107.4 billion within the first quarter. The second quarter hit $123.9 billion, the perfect quarter LIMRA has ever tracked.
None of that tells you whether or not an annuity belongs in your plan. A banner 12 months for the business provides up hundreds of thousands of separate choices. These consumers had totally different earnings, spending, and accounts than you do.
The query is whether or not the reasoning behind these purchases applies to you.
Why Are Annuity Gross sales at a Report Excessive?
Annuity payout charges monitor prevailing rates of interest. Charges have stayed larger for longer than most consumers anticipated after the 2022 and 2023 hikes. That lets insurers promise extra month-to-month earnings for a similar lump sum than they may a couple of years again. Two different forces add to the surge: market swings and a demographic wave hitting retirement age.
Market swings performed a job too. LIMRA factors to a stretch of sharp volatility in 2026. It pushed demand towards merchandise that provide protected development and assured earnings on the identical time. A variety of savers grew bored with watching their balances swing and wished a few of that cash to sit down nonetheless.
Demographics add the biggest push. Greater than 4.1 million Individuals flip 65 yearly by 2027, a wave the business calls Peak 65. “Many don’t have pensions or different earnings sources to fulfill their primary residing bills in retirement,” LIMRA’s Bryan Hodgens mentioned of the group.
For lots of those consumers, a assured examine issues greater than beating the market. LIMRA expects gross sales to carry above $450 billion in 2026 on that very same demand. Maturing contracts and broader distribution add to it, even because the Fed retains chopping charges.
Not All Annuities Are Promoting for the Similar Causes
That headline quantity hides a break up. Some merchandise grew as a result of consumers wished extra market upside. Others grew as a result of consumers wished regular, assured earnings every month. Right here’s how the primary quarter of 2026 broke down by product:
| Product | Q1 2026 Change | What It Does | Typical Prices |
| Fastened-rate deferred annuity | -12% | Locks in a set price for a set time period, near a CD | Low, constructed into the speed |
| Fastened listed annuity (FIA) | -4% | Credit beneficial properties tied to a market index whereas defending your principal | Rider charges for ensures |
| Registered index-linked annuity (RILA) | +21% | Much like an FIA, with extra upside and a few draw back publicity tied to the index | Rider charges for ensures |
| Single premium rapid annuity (SPIA) | +22% | Converts a lump sum into earnings funds that begin immediately | Low, constructed into the payout |
| Deferred earnings annuity (DIA) | +5% | Delays the earnings begin date for a bigger eventual payout | Low, constructed into the payout |
LIMRA credit the FIA decline to consumers transferring towards RILAs for extra upside in a powerful inventory market. Each merchandise shield your principal. Just one caps how a lot of the market’s achieve you retain.
Conventional variable annuities sit outdoors this desk as a result of they work in a different way. They make investments instantly in market subaccounts, just like mutual funds, with no principal safety in-built. Gross sales grew 17% in the identical quarter, to $17.2 billion, as some consumers traded safety for full market publicity and the choice so as to add earnings ensures on high.
Understanding which product a headline is naming tells you whether or not it has something to do with your personal state of affairs.
An Annuity Is Solely One Layer in Your Earnings Stack
For many consumers, an annuity works as one layer in an earnings stack. That stack additionally contains Social Safety, financial savings withdrawals, and, for a shrinking variety of retirees, a pension.
Social Safety works as a assured earnings ground for many retirees. How a lot of that ground you get is determined by while you declare it. Some retirees have a look at their anticipated profit and understand it received’t cowl important bills. They go on the lookout for a second ground to fill the shortfall. An annuity is one possibility for constructing it, alongside different approaches with their very own prices.
The stack solely works when every layer is sized proper. An annuity that duplicates earnings you’d already get from Social Safety or a pension prices you flexibility with out including safety. One which’s too small to matter simply provides value.
The Prices That Don’t Present Up within the Gross sales Numbers
Each annuity buy deserves the identical scrutiny as another five- or six-figure resolution. That’s true irrespective of how the business’s numbers look this 12 months.
Most annuities cost a give up price when you withdraw cash early. That price typically runs 5 to 10% within the first few years, stepping down over time. Both means, the cash stays locked up for a stretch, typically years. The rider charges within the desk pay for ensures on variable and listed merchandise. You pay them whether or not or not you ever use what they assure. Learn the illustration earlier than you signal something. Ask what occurs to these charges when you by no means use the rider.
Taxes deserve a re-evaluation too. Development inside a non-qualified annuity grows tax-deferred. Evaluate that to a taxable brokerage account, taxed at long-term capital beneficial properties charges. Or evaluate it to cash you might put right into a Roth account as a substitute. Deferral pushes the tax invoice down the street; it nonetheless arrives. Withdrawals from a non-qualified annuity’s beneficial properties get taxed as peculiar earnings. For many savers, that’s a better price than long-term capital beneficial properties.
Study avoiding widespread annuity errors earlier than you commit to at least one.
Ask Two Questions When You Contemplate an Annuity Advice
Most annuities attain consumers by an agent or advisor who earns a fee on the sale. It’s constructed into the product and paid by the insurer, and it could possibly form the phrases you’re provided. Earlier than you weigh any suggestion, ask two questions instantly: How are you paid on this? And which customary are you held to?
The usual is larger than it was once, and most of the people haven’t caught as much as it. Annuity gross sales now should clear a greatest curiosity bar in each state. That comes by the NAIC’s mannequin regulation, or in New York, an equal rule of its personal. That’s an actual bounce from the previous suitability customary: a suggestion solely needed to be usually acceptable in your state of affairs.
Two requirements can sit above that ground. Variable annuities and RILAs are registered securities. A broker-dealer consultant promoting both one additionally solutions to the SEC’s Regulation Finest Curiosity. A fiduciary adviser owes you that very same obligation throughout the entire relationship, not simply at a single sale, and that obligation sometimes comes with out a fee hooked up.
An advisor with no fee driving in your reply should still land on the identical suggestion. However you’ll comprehend it wasn’t the fee that bought them there.
Averages Miss What Your Personal Plan Wants
Vanguard constructed assured earnings into some office retirement plans this 12 months, and its personal researchers had been candid concerning the limits. The initiative is designed to enhance outcomes throughout a broad, assorted group of savers. However your personal numbers are those that matter in your plan. The identical logic applies to a powerful business gross sales 12 months.
The remaining query is what occurs to the remainder of your portfolio, the cash an annuity by no means touches. A portfolio that loses worth early in retirement, when you’re additionally withdrawing from it, faces actual sequence-of-returns threat. An annuity protects solely the cash inside it.
Tips on how to Resolve If an Annuity Matches Your Retirement Plan
The one approach to know if an annuity improves your final result is to run your personal numbers subsequent to it. A generic projection constructed for the common saver can’t reply that for you.
- Mannequin your plan twice within the Boldin Planner, as soon as with an annuity in-built and as soon as with out it.
- Evaluate the 2 variations on projected out-of-money age and property worth.
- Run the Lifetime Annuity Calculator with a couple of totally different product varieties. A hard and fast-rate deferred annuity and a right away earnings annuity produce totally different numbers for a similar lump sum.
- Learn by the full tradeoffs earlier than you decide to something.
These two numbers, projected out-of-money age and property worth, assist determine this for you. This 12 months’s gross sales complete is only a information level. What you do with your personal plan remains to be your name, and that’s place to be in.
Continuously Requested Questions
Annuity gross sales have climbed for 4 straight years, and no single motive explains it. Rates of interest have stayed excessive sufficient to make payout quantities engaging. Market volatility in 2026 pushed some savers towards merchandise that shield towards losses. A rising wave of Individuals reaching age 65 has added consumers with no pension to fall again on.
Whether or not an annuity is an effective funding in 2026 relies upon by yourself state of affairs. The present price surroundings makes payout quantities larger than they’ve been in a long time, which helps consumers who need assured earnings. Your bills and different earnings sources matter. So does how a lot of your portfolio you’re keen to transform into a hard and fast cost.
Annuities carry actual downsides in alternate for assured earnings: diminished liquidity, charges, and the way beneficial properties get taxed. Most annuities cost a give up price when you withdraw cash early. That price typically runs 5 to 10% within the first a number of years. Riders that add ensures carry their very own prices. Development inside a non-qualified annuity will get taxed as peculiar earnings while you withdraw it. For many savers, that could be a larger price than long-term capital beneficial properties.
Whether or not an annuity suits a retirement plan comes right down to modeling it two methods. Run it as soon as with the annuity in-built, and as soon as with out it. Evaluate the 2 variations on projected out-of-money age and property worth. That exhibits whether or not the assured earnings is price what it prices in flexibility. If the annuity model holds up higher on each measures, it’s incomes its place within the plan.