Remove all doubt that annuities are back in fashion because data confirm as much. By some estimates, 2025 was the fourth consecutive year in which annuities sales broke records. It’s easy to understand why that was the case.
Falling interest rates make longer duration products more attractive. Thousands of American workers get closer to or enter retirement every day, making it difficult to stomach higher equity market volatility.
Annuities are also gaining popularity because more clients are realizing they could live longer than grandparents and parents, further highlighting the importance of lifetime income. With the income stream provided by annuities, clients get peace of mind, meaning they can reduce or eliminate financial stress – a selling point unto itself.
The point is advisors should expect more clients to be annuities-inquisitive meaning this is a great value-add/conversation starter for clients near or in retirement. Read on to discover more.
Signs Point to an Annuities Boom
Alright, so the past four years are, well, in the past, but recent commentary from the Life Insurance Marketing and Research Association confirms annuities are poised for another multi-year stretch of growth.
“The U.S. individual annuity market is entering an era of sustained strength,” notes LIMRA Vice President Keith Golembiewski. “Building on four consecutive years of record sales, the outlook for 2026 — 2028 points to continued strong annuity sales activity supported by favorable demographics, resilient economic conditions, and powerful consumer demand for solutions that deliver protection, growth and guaranteed income.”
Additionally noteworthy is the breadth of annuities growth. Some clients are asking advisors about fixed-rate deferred (FRD) and fixed indexed annuity (FIA) products while others are keen on registered index-linked annuities (RILAs).
“Even traditional variable annuities (VAs) are showing a resurgence, thanks to stronger equity performance, the expansion of fee-based options, and innovative living benefit features,” adds Golembiewski. “Because the Federal Reserve began shifting toward rate easing late in 2025, the market may see more interest in longer-duration products. But overall, indications suggest 2025’s sales environment was exceptionally strong.”
Demographics Driving Interest in Annuities
Obviously, there are demographic considerations with annuities. Namely age. These products aren’t relevant to Gen Z and millennials and probably not to pertinent to younger Gen Xers. Still, the annuities is audience and America’s aging population goes a long way toward explaining why a staggering $1.8 trillion of annuities were sold from 2021 through 2028. If that was the market capitalization of a stock, it’d almost be good enough for entry into the magnificent seven.
Musing aside, a primary reason why a new golden age of annuities is upon the wealth management community is because so many clients are in or close to entering their golden years.
“Between 2023 and 2028, the number of Americans aged 65 or older will grow by more than 9.2 million, surpassing 68 million retirees. Annuity purchases concentrate heavily between ages 55 and 75, meaning the industry is benefiting from peak retiree formation. This demographic trend alone provides a multiyear growth engine for the annuity marketplace,” concludes LIMRA’s Golembiewski.
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