LIMRA Secure Retirement Institute (LIMRA SRI) predicts that while both income-focused annuity product sales and accumulation-focused annuity product sales will grow in the next five years, accumulation-focused annuity product sales will grow at a much faster pace.
LIMRA SRI is forecasting accumulation-focused annuity products to grow 30-35% by 2023. Of the income-focused annuity product sales, those that offer deferred income are predicted to grow 10-15% while LIMRA SRI forecasts immediate income product sales to increase 15-20% by 2023.
Since 2011, accumulation-focused annuity product sales have experienced steady growth, which LIMRA SRI researchers predict will continue over the next five years. As a result of low interest rates, income-focused annuity sales had been declining since 2015 until interest rates increased in 2018.
According to LIMRA SRI research, less than a third of Boomers aged 60 and under have access to a pension. Given this, guaranteed retirement income solutions should be growing as these pre-retirees begin to think about supplementing the income they receive through Social Security. However, LIMRA SRI data show income-focused annuity product sales have remained lower than accumulation-focused annuity products.
LIMRA SRI research finds there was around $30 billion paid out in guaranteed income last year through annuities. With more than 10,000 Americans turning 65 each day, LIMRA SRI estimates the demand for retirement income products will expand to nearly $32 trillion by 2026.
For additional insights into the U.S. annuity market, we invite you to watch the latest installment of LIMRA Unplugged. In this episode LIMRA Research Director Alison Salka talks with Todd Giesing, LIMRA SRI annuity research director, about 2018 annuity market results and what LIMRA SRI expects in 2019 and beyond.