U.S. Annuity Market Achieves Unprecedented Growth: What It Means for Your Retirement

Annuity Regulations, Deferred Annuities, Deferred Income, Deferred Income Annuity (DIA), Fixed Annuities, Fixed Indexed Annuity (FIA), Fixed Rate Deferred Annuity (FRD), Immediate Annuities, Immediate Income, Indexed Annuities, Life Insurance Marketing and Research Association (LIMRA), Longevity Risk, Market Risk, Market Volatility, Multi-Year Guaranteed Annuity (MYGA), Principal Protection, Registered Index-Linked Annuity (RILA), Retirement Income, Retirement Planning, Retirement Savings, Single Premium Deferred Annuity (SPDA), Single Premium Immediate Annuity (SPIA), Tax Exposure, Tax-Deferred Retirement Plan, Variable Annuities, Wealth Transfer 4 Minutes

The U.S. annuity market has demonstrated remarkable resilience and growth, with sales consistently breaking records. A recent report from LIMRA highlights this robust performance, indicating that U.S. annuity sales have surpassed $100 billion for the seventh consecutive quarter [1]. This sustained growth underscores the increasing importance of annuities in modern retirement planning.

Record-Breaking Sales Figures

According to LIMRA’s U.S. Individual Annuity Sales Survey, total U.S. annuity sales reached an impressive $119.2 billion in the second quarter of 2025, marking an 8% increase year-over-year. This achievement sets a new quarterly record and contributes to a record-breaking first half of 2025, with total sales reaching $225.8 billion, up 4% from the previous year [1].

Bryan Hodgens, senior vice president and head of LIMRA research, attributes this surge to a combination of favorable economic conditions and systemic market changes. He notes, “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” [1]. LIMRA projects total annuity sales to exceed $400 billion by the end of 2025.

Performance Across Annuity Types

The growth in the annuity market is broad-based, with several product types contributing significantly:

  • Fixed-Rate Deferred (FRD) Annuities: Sales for FRD annuities totaled $45.2 billion in the second quarter, an 11% increase from the second quarter of 2024. Year-to-date sales reached $84.9 billion, up 1% year-over-year. This strong performance is partly due to policies maturing and the market anticipating interest rate adjustments, making FRDs an attractive short-term solution for risk-averse investors [1].
  • Fixed Indexed Annuities (FIA): FIA sales continued their upward trajectory, reaching $32.8 billion in the second quarter, a 5% increase over the prior year. The first half of 2025 saw record FIA sales of $60.6 billion, up 1% from the first half of 2024. FIAs have seen their sales double since 2020, driven by increased interest in protected investment growth opportunities [1].
  • Registered Index-Linked Annuities (RILA): RILAs set new quarterly and mid-year sales records, with second-quarter sales at $19.1 billion (up 15%) and first-half sales at $36.7 billion (up 18%). The appeal of RILAs lies in their protected growth potential combined with attractive caps and participation rates, making them well-suited for the current economic climate. New market entrants and product introductions are expected to sustain RILA’s growth [1].
  • Traditional Variable Annuities (VA): While experiencing a slight dip of 3% to $14.9 billion in the second quarter due to market volatility, traditional VA sales were still up 4% year-to-date, reaching $30.2 billion [1].
  • Income Annuities (SPIA and DIA): Single Premium Immediate Annuity (SPIA) sales increased by 6% to $3.6 billion in the second quarter, though year-to-date sales were down 5% to $6.6 billion. Deferred Income Annuity (DIA) sales fell 7% to $1.2 billion in the second quarter, with year-to-date sales down 14% to $2.1 billion [1].
The U.S. annuity market demonstrates unprecedented growth, with sales consistently breaking records and contributing to financial stability for retirees. Call (772) 410-4786 or visit GetMyAnnuity.com to schedule your free consultation.

Driving Factors Behind Annuity Popularity

The sustained growth in annuity sales can be attributed to several key factors:

  • Aging Population: A significant driver is the demographic shift, with an increasing number of Baby Boomers entering retirement. The U.S. population aged 65 and older is projected to grow from 58 million in 2022 to 82 million by 2050, creating substantial demand for guaranteed income solutions [3]. Approximately 12,000 Americans are reaching age 65 every day in 2025 [3].
  • Economic Uncertainty: Retirees and pre-retirees have faced considerable economic uncertainty, including market volatility and inflation. Annuities offer a sense of financial security and peace of mind by providing guaranteed income streams, which is particularly appealing in unpredictable economic environments [1, 3].
  • Product Innovation: Continuous innovation in annuity products, offering greater transparency and tailored solutions, has expanded their appeal to a broader range of investors and advisors [1, 2].
  • Increased Awareness: Growing awareness among both investors and financial advisors about the critical role of guaranteed income in retirement planning has also contributed to the market’s expansion [1].

Challenges and Considerations

Despite the positive trends, the annuity market faces certain challenges:

  • Interest Rate Fluctuations: Declining interest rates can reduce the appeal of fixed-rate products and compel carriers to lower payout rates for income annuities [2].
  • Complexity and Liquidity: Annuities can be complex, often associated with intricate terms, layered fees, and liquidity restrictions such as surrender charges. This complexity can make product comparisons difficult and deter some investors who prioritize immediate access to their funds [2]. A 2024 survey revealed that only 19% of American adults could correctly define an annuity, highlighting a need for greater education [2].

The Path Forward

The robust performance of the U.S. annuity market in 2025 underscores a clear trend: annuities are becoming an indispensable component of comprehensive retirement strategies. While challenges related to interest rates and product complexity persist, the fundamental demand for guaranteed lifetime income, especially from an aging population, is expected to drive continued growth. As product innovation and consumer education advance, annuities are poised to play an even more critical role in securing financial futures.

Annuities provide a foundation for a secure and peaceful retirement, offering guaranteed income and peace of mind amidst economic uncertainties. Call (772) 410-4786 or visit GetMyAnnuity.com to schedule your free consultation.

References

[1] LIMRA. (2025, September 4). LIMRA: U.S. Annuity Sales Exceed $100 Billion for Seventh Consecutive Quarter. https://www.limra.com/en/newsroom/news-releases/2025/limra-u.s.-annuity-sales-exceed-$100-billion-for-seventh-consecutive-quarter/

[2] Investopedia. (2025, June 10). Interest in Annuities Is Soaring: Understanding the 2025 Trend. https://www.investopedia.com/why-annuities-are-popular-11748169

[3] CEP-DC.org. (2025, August 18). 30+ U.S. Annuity Trends & Industry Stats (2025). https://www.cep-dc.org/annuity-trends/

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