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Annuities On A Hot Streak: Retiree Demand Growing

Author

Keith Golembiewski
Assistant Vice President and Director of Annuity Research
LIMRA and LOMA
KGolembiewski@limra.com

February 2026

The U.S. individual annuity market is entering an era of sustained strength. 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. According to the latest LIMRA forecast, the industry is positioned not only to maintain its extraordinary momentum but also to unlock new opportunities as trillions of dollars move through the retirement ecosystem.

Fourth Straight Record Year

2025 is projected to be the fourth consecutive record year for individual annuity sales, a remarkable achievement powered by a rare combination of elevated interest rates, strong equity markets, and aging demographics. Consumers increasingly seek financial stability and downside protection, and annuities remain uniquely positioned to meet these needs.

Market volatility in early 2025 — paired with attractive crediting rates — has continued to drive investors toward fixed-rate deferred (FRD) and fixed indexed annuity (FIA) products. Meanwhile, registered index-linked annuities (RILAs) appear to be on pace for another record year as consumers embrace growth potential combined with downside protection. 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.

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.

Economic Drivers

Two primary economic factors influenced annuity sales: equity market performance and interest rates.

  • The S&P 500 gained roughly 16% year to date through late 2025, building on multiple years of double‑digit increases, fueled by AI-driven productivity and strong corporate earnings. (Source: Standard & Poor's (S&P); Moody's Analytics Forecasted)
  • Though valuation concerns and geopolitical pressures linger, forecasts suggest that the index will moderate in 2026 before strengthening again through 2028.
  • Interest rates, which surged between 2023 and 2025, are expected to stabilize as the yield curve normalizes. The 10‑year Treasury rate is projected to settle near the mid‑4% range through 2028 — supporting healthy crediting levels across annuity products. (Source: U.S. Board of Governors of the Federal Reserve System (FRB); Moody's Analytics Forecasted)

These forces create a constructive economic backdrop: stable rates, solid equity markets, and manageable inflation all reinforce ongoing consumer interest in guaranteed solutions.

A Powerful Tailwind

America’s aging population is the single most important long‑term driver of annuity demand.

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. (Source: U.S. Census Bureau (BOC); Moody's Analytics Forecasted)

Additional Accelerators

Alongside demographics and economics, three structural factors continue to boost the outlook:

  1. Record “money in motion”
    More than $1.8 trillion in annuities have been sold since 2021 — much of it in shorter‑duration FRDs. As these contracts exit surrender periods, carriers and advisors will see unprecedented opportunity for replacement activity and cross‑product repositioning.
  1. Policy and regulatory developments
    The SECURE 2.0 Act of 2022, new RILA registration frameworks, and a retreat in proposed fiduciary rule expansions all reduce barriers and create a more supportive policy environment for lifetime income adoption.
  1. AI‑powered transformation
    Agentic AI, automated suitability reviews, and digital‑first standards are shrinking processing times from weeks to hours. These operational improvements enhance transparency, advisor productivity, and customer experience — broadening access to annuity solutions.

2026: Steady Strength

Sales in 2026 are expected to remain near 2025’s historic highs. Although interest rates may moderate slightly as the Federal Reserve continues its easing cycle, replacement activity will help sustain momentum. Consumers locking in guarantees or transitioning maturing annuity assets will continue to drive elevated sales levels.

Key product expectations for 2026 include:

  • FRD annuities moderating from peak levels but remaining above historical norms.
  • FIAs and RILAs maintaining their position as top growth drivers within the industry.
  • VAs holding steady on the strength of rising equity markets and attractive living benefit riders.

Overall, 2026 marks not a step back but a leveling-off after record-setting highs.

2027 – 2028 Outlook

By 2028, the retirement landscape will reach a pivotal milestone: the U.S. will have over 4 million more retirees than in 2025, continuing to fuel demand for products that provide reliable income and market participation.

As equity markets strengthen and interest rates stabilize, the forecast anticipates:

  • Continued robust sales of RILAs and VAs due to investor appetite for upside in rising markets.
  • FIA sales to remain strong but relatively flat due to competitive pressures.
  • FRD sales to normalize from earlier peaks but stay above pre‑2022 levels.
  • Demand for guaranteed income features to grow, driven by demographic expansion and rising longevity needs.

Even as growth moderates slightly from unprecedented highs, the overall outlook remains decidedly positive: a larger retiree population, strong equity performance, and rollover activity all reinforce the industry’s strength.

Figure 1. Individual Annuity Sales, 2018 – 2024 and Projected Sales, 2025 – 2028

Annualized Premium in ($billions)

Mouse over the dots on the lines to see the values for each data point. Filter the data in this chart by clicking on a color in the chart legend.

Built for the Future

The forecast is clear: The U.S. annuity market remains one of the strongest sectors within the retirement ecosystem. Supported by demographic expansion, product innovation, improving digital infrastructure, and strong macroeconomic fundamentals, annuities are positioned to play an increasingly central role in Americans’ retirement strategies.

Even as growth moderates slightly after several record years, the overall trajectory is undeniably positive. Rising retiree demand, elevated rollover activity, consistent interest in guaranteed income, and growing adoption of risk‑mitigating accumulation products underscore a powerful, multiyear runway for continued success.

The annuity market isn’t slowing down — it’s stabilizing at a high altitude. And with more Americans seeking financial confidence in retirement, the industry is primed for durable, long-term strength.

 

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