Sales of annuities in the first quarter of 2025 soared to $105 billion, and that was the sixth consecutive quarter when sales topped $100 billion, according to LIMRA, a trade association for annuities.
Annuities appear to be just the right instrument, especially for retirees, to ride out the economic changes in the current economy.
Fixed-rate annuities were being offered at above 6 percent in May, an interest rate that is better than most high-interest savings accounts and CDs. Investors moved to fixed-rate annuities to lock in the interest rate before expected interest rate cuts by the Federal Reserve later this year.
Meanwhile sales of fixed-rate deferred annuities also grew this year. This type of annuity allows investors to save money, grow it at a fixed interest rate for a period of time, and start receiving payouts later.
For older investors and retirees who have reason to fear market volatility, Multi-Year Guaranteed Annuities (MYGA) have a higher payout and can be held longer than a CD, according to Kiplinger. MYGAs have a guaranteed, fixed interest rate for the term of the annuity up to about 10 years. The initial investments is secure and taxes are deferred.
Rick Good spent ten years in the newspaper business, including with The News & Observer (Raleigh, NC) and The Greenville News (Greenville, SC). He co-wrote, with Melinda Coleman, Rutledge to Riley: Governors of South Carolina, 1776–Present (Published by The Greenville News), and is the author of Mind Games Trivia #1 (Amazon). He has recently spent 15 years creating original trivia content through Sounds Good Mobile Entertainment and continues that with his new company, SGME Software. He edits The Smart Reader’s money, real estate, and business coverage.
