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.
