Rising interest rates, market volatility and growing demand for guaranteed retirement income are fueling historic annuity sales.
U.S. annuity sales are in blockbuster mode these days, with total retail sales up $461 billion in 2025, according to Limra.
Pulling the lens back, annuity sales keep stacking up, with fourth-quarter sales jumping 12% to $114.4 billion. That’s the ninth consecutive quarter of $100-plus billion in sales.
“We’ve seen continued growth in annuity interest, especially fixed indexed annuities, largely due to higher interest rates and market volatility fatigue,” said Clinton Richey, owner at Richey Insurance Agency in Houston, Tx. “Clients nearing retirement are prioritizing guaranteed income more than upside speculation.”
With sales soaring, here’s a closer look at five big takeaways from the annuity industry’s powerhouse sales numbers.
Why Fixed Indexed and RILA Annuities Are Leading Sales Growth
Limra figures show that indexed annuities are far and away the top-selling annuity channel.
Led by registered index-linked and fixed indexed annuities, index products accounted for 45% of total sales in 2025, up from 24% in 2015.
“Expanded capacity, enhanced products, growing distribution, and investor demand have propelled sales of these solutions,” said Bryan Hodgens, senior vice president and head of Limra research. Limra is forecasting RILA and FIA sales to grow through 2028 and expand their market share of the total annuity market, he noted.
Peak 65, Higher Interest Rates and Better Products Are Expanding Demand
The annuity sector’s demand story comes down to several strong themes forging simultaneously.
“First, we’re right in the middle of what the industry calls ‘Peak 65,’ where more than 4 million Americans are turning 65 every single year,” said Andrew Latham, a certified financial planner and content director at SuperMoney.com. “These folks are staring down retirement and realizing that Social Security and a 401(k) might not cut it on their own, and they want guarantees.”
Additionally, interest rates are higher than they were a few years ago, making returns on fixed and indexed annuities genuinely competitive.
“When your annuity is offering a better rate than a CD at your local bank, that gets people’s attention,” Latham noted. “The annuity product lineup has gotten way better, too. Carriers have spent the last five years rolling out more flexible, more transparent products that frankly nobody had heard of a decade ago.”
Market Volatility Is Pushing Retirees Toward Guaranteed Income
In addition to higher interest rates making fixed and fixed-indexed annuities relatively more appealing than bonds and CDs, financial services professionals are also seeing a behavioral shift.
“Following years of equity market turbulence, many retirees are now prioritizing income certainty over potential capital appreciation,” said Thomas Drury, ACII, a chartered insurance professional and co-founder at The Investors Centre. “We believe that demand is increasing, especially for products which combine protection features with limited exposure to market gain.”
Now, risk psychology is in play, a factor that favors annuities. “Recently, increased market volatility has caused consumers to seek more downside protection,” Drury said.
Why Fixed and Fixed Indexed Annuities Appeal to Long-Term Retirees
With safety and income among the top priorities for retirees right now, fixed index annuities appear to be performing best.
“It’s not that other annuities are a questionable choice, it’s just that with most fixed index annuities, you’re guaranteed to not lose anything, and you can design your own income stream now or in the future,” said Dennis( DJ) Schlegel, Jr., founder of Emeritus Wealth Group, in Morristown, N.J. “Fixed annuities can do both of those without disinheriting the family like you may with a single premium income annuity.”
The Biggest Risk to Annuity Sales: Falling Interest Rates
Latham believes the biggest risk to the annuity sector is interest rates and their direction.
“If rates drop meaningfully, the products that have been driving a lot of the growth, particularly fixed-rate deferred annuities, lose their competitive edge,” he said. “Limra has already flagged that fixed-rate deferred sales could fall below 2025 levels this year for exactly that reason. When a CD or Treasury starts looking comparable again, the urgency to lock in an annuity rate goes down.”
See How Much You Could Earn With Today’s Best Rates
What Annuity Buyers Should Do Now to Lock In Competitive Rates
With demand high and options expanding, annuity buyers are in a strong position in 2026. But they can grow even stronger if they make the right moves. These tips should get the job done.
“Shop around, and I mean actually shop around,” Latham advised. “Annuity rates and features vary significantly between carriers, and most people just go with whatever their advisor puts in front of them.”
Latham recommends getting quotes from at least three or four companies. “A half-percent difference in a crediting rate might not sound like much, but over a 10 or 20-year accumulation period, it adds up to real money,” Latham noted.
It’s also advisable to pay close attention to surrender charges and the surrender period length.
“Some products lock you in for 10 years with steep penalties if you need to access your money early,” Latham said. “If there is any chance you will need liquidity, look for products with shorter surrender periods or generous free withdrawal provisions, even if the headline rate is slightly lower.”
Another strong move is to evaluate annuities as either a form of income insurance or a source of investment returns. “Consumers should compare the financial strength rating of each insurance company, understand the implications of liquidity constraints, and determine how the annuity fits into their total portfolio, including Social Security and other investments,” Drury said.
On the defensive side of the line, one of the largest mistakes consumers make when evaluating an annuity is focusing on headline rates without fully understanding the annuity’s underlying mechanics over time.
“When utilized correctly to achieve retirement income objectives, annuities are a very powerful tool; however, they must be selected intentionally and with complete transparency,” Drury added.
