Something has quietly shifted in how Americans think about retirement money. For decades, annuities carried a reputation as clunky, opaque products pushed by salespeople more focused on commissions than clients. That perception hasn’t fully disappeared. Yet the numbers tell a different story today. Demand for guaranteed income has surged to levels the industry has never seen before, driven by a mix of market fear, aging demographics, and genuinely improved products. What’s making annuities attractive again isn’t just marketing. It’s a combination of forces that converged at the same time: a volatile stock market that rattled investor confidence, the near-extinction of traditional pensions, and interest rates that finally made fixed-income products worth owning again. The timing couldn’t be more interesting, or more consequential.
A Sales Record That Keeps Getting Broken
The numbers behind the annuity comeback are striking by any measure. Total annuity sales posted $432.4 billion in 2024, up 12% year over year, according to LIMRA’s U.S. Individual Annuity Sales Survey. That marked the third consecutive year of record-high sales, a streak the industry hadn’t seen before.
LIMRA’s Retail Annuity Sales Survey shows total U.S. annuity sales marked a new record in 2025, increasing 6% to $461.3 billion. To put that growth in perspective, from 2022 to 2024, annuity sales topped $1.1 trillion according to LIMRA, and overall annuity sales are up 70% since 2014.
Total U.S. annuity sales increased 4% to $119.3 billion in the third quarter of 2025 alone, marking the eighth consecutive quarter of more than $100 billion in sales. That kind of consistency is hard to dismiss as a blip.
What’s Actually Driving the Demand
Annuities have grown more popular in recent years due to factors like stock market volatility, high interest rates, and sticky inflation. These forces aren’t acting independently. They’re reinforcing each other in ways that make guaranteed income feel more urgent to a large slice of the population.
Persistent market swings have made many retirees and near-retirees uneasy about relying too heavily on stocks. In 2022, the S&P 500 fell 19.4%, its worst annual performance since 2008, and that downturn marked an inflection point as many investors began turning to annuities for more stable retirement income.
Interest rates rose rapidly from 2022 through 2023, with the Federal Reserve raising the federal funds target rate from near zero to a range of 5.25% to 5.50%. While rates have since dipped slightly, the target rate still sits well above the historically low levels of the 2010s, and this environment has enabled insurers to offer higher yields on fixed annuities.
The “Peak 65” Wave and the Pension Gap
America is entering a historic surge, with more than 4.1 million Americans turning 65 each year through 2027. What used to be 10,000 per day over the past decade is now over 11,200 every day. That’s an enormous cohort reaching retirement age in a short window of time.
The problem is that many of them are arriving without the financial safety net earlier generations had. Unlike older retired Baby Boomers, the majority of Peak 65’ers don’t have pensions, which used to help fill the income gap left by Social Security. Social Security, for its part, was only ever designed to replace a portion of pre-retirement income.
Two-thirds of Baby Boomers turning 65 between 2024 and 2030 will not be financially prepared to maintain their pre-retirement lifestyles, and more than half of the 30.4 million boomers in the “peak” age range will rely primarily on Social Security for income. That gap is real, and annuities are increasingly being positioned as a way to fill it.
The Fear of Outliving Your Money
According to a 2025 analysis by the Transamerica Center for Retirement Studies, retirees in 41 states and Washington D.C. are projected to deplete their savings before the end of their lives, with an average shortfall of $115,000. That figure has a way of concentrating the mind.
LIMRA research consistently finds a majority of consumers worry about running out of money in retirement. For Generation X consumers, who are less likely than older generations to have a pension, nearly six in ten are concerned about outliving their savings.
Retirees with annuities report financial security and more predictable budgets as key benefits, and nearly half of retirees who took lump sums and whose employer offered an annuity now wish they had selected guaranteed lifetime income instead. That’s more than triple the share who felt that way in 2017. Hindsight, it turns out, is a powerful motivator.
Fixed Indexed Annuities Take Center Stage
FIA sales totaled $125.5 billion in 2024, up 31% from the prior year, marking the third consecutive year of record FIA sales. These products have become the engine of the broader annuity market’s growth. Their appeal is straightforward: principal protection combined with the chance to earn returns tied to a market index.
Fixed-index annuities guarantee your principal while tying performance to market indexes such as the S&P 500, with predetermined caps on gains. If the market performs well, you share in the gains up to a certain point. If the market declines, the annuity’s guarantees ensure you won’t lose money already credited to your account.
FIA sales remain a steady growth engine for the overall annuity market. Since 2020, FIA sales have doubled as interest in protected investment growth opportunities increased. That kind of sustained trajectory reflects a structural shift in investor preferences, not just a temporary flight to safety.
RILAs: The Fastest-Growing Product in the Market
If fixed indexed annuities are the workhorse, registered index-linked annuities have become the thoroughbred. LIMRA data reveals that RILA sales set new annual sales records in 2025, increasing 20% year over year to $79.6 billion. That’s the eleventh consecutive year of record-setting growth for this product category.
Sales of RILAs increased from $3.7 billion in 2015 to $65.4 billion in 2024 as the number of carriers offering these products rose from 4 to 21. That expansion in product supply signals that the industry itself is betting heavily on this segment.
RILAs are attractive to both insurers and investors, providing investors the ability to mitigate equity market downturns while allowing companies greater flexibility to hedge against risk as market conditions change. The structure gives buyers a middle ground between full market exposure and locking in a fixed rate, which suits the current uncertain climate well.
The Psychological Case: What Annuity Owners Actually Say
Data on sales is one thing. What people who actually own annuities report about their experience is another matter entirely. A BlackRock survey found that 97% of annuity owners say their annuities help them worry less about running out of money, and 93% say having an annuity helps them worry less about day-to-day expenses.
In the same BlackRock research, 88% of annuity owners surveyed think every retiree’s portfolio should have at least some money invested in a product that guarantees lifetime income, and 81% say it’s more important for today’s retirees than it was for previous generations.
A new survey from Nationwide found that 76% of annuity owners are confident they will be able to retire when they want. That confidence gap between those who own annuities and those who don’t is one of the more compelling arguments for the product’s value, even accounting for the survey’s source.
The Role of Legislation: SECURE Act and SECURE 2.0
Policy has played a real role in clearing the way for annuities to enter retirement accounts more easily. The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) made it easier for plan sponsors to create annuitized options within a defined contribution plan similar to the benefits received from defined benefit pensions. The Securing a Strong Retirement Act of 2022 (SECURE 2.0) supports the use of qualified longevity annuity contracts (QLACs).
Congress has enabled private sector employers to allow their employees to transition some of their investments from 401(k) funds into annuities, which allows people to create their own form of a personal pension for retirement. Not many employers are providing this option yet, however, and greater adoption could allow younger generations to generate personal pensions.
According to the Employee Benefit Research Institute’s 2025 Retirement Confidence Survey, nearly 70% of adults say having default investments in their retirement accounts that include annuities or other lifetime income products is appealing. The gap between consumer interest and actual adoption remains wide, which suggests room for significant further growth.
The Challenges That Still Exist
Not everything about this boom is straightforward. The annuity industry continues to grapple with the issue of its own complexity. Newer products often offer greater transparency, but the category as a whole has long been associated with layered fees, intricate terms, and confusing payout structures that can overwhelm consumers and make product comparisons difficult.
According to the 2024 Policygenius Annuities Literacy Survey, only 19% of American adults could correctly define an annuity, and just 5% knew both what it was and when it might be useful. That’s a meaningful barrier to adoption, particularly for middle-income households who might benefit most.
Adoption remains limited: only about one in five pre-retirees currently owns an annuity, while nearly half expect inadequate guaranteed income in retirement. The mismatch between what people fear and what they’ve done about it is still one of the defining tensions in retirement finance today.
What the Road Ahead Looks Like
Over the last three years, annuities have repeatedly set new sales records. While favorable economic conditions have bolstered sales, there also have been systemic market changes that have expanded the market. Product innovation, expanded capitalization, and growing awareness by both investors and advisors of the need to build in guaranteed income into retirement planning have lifted the market.
The U.S. population ages 65 and over is expected to grow by more than 7.5 million from 2023 to 2027. LIMRA’s research shows annuity buyers tend to be around 65, so this growth will create a larger target market for income solutions. That demographic tailwind isn’t going away anytime soon.
While recent favorable economic conditions have helped to double annuity sales over the past five years, LIMRA believes consumers’ greater understanding of the value of guaranteed income will keep demand relatively steady, regardless of shifting economic conditions. That’s a meaningful distinction: demand is no longer purely rate-dependent. It’s becoming structural.
The annuity renaissance isn’t just a product story. It reflects something deeper: a growing recognition that retirement income planning, for millions of Americans, has a gap that markets alone cannot reliably fill. Whether annuities become as standard a retirement tool as the 401(k) once was may depend less on interest rates or product design, and more on whether the industry can earn trust from a public that has every reason to be skeptical. That’s the harder project, and it’s still very much underway.
