Curated News
By: NewsRamp Editorial Staff
December 08, 2025
Americans Shift to Annuities for Guaranteed Retirement Income
TLDR
- Annuities offer a strategic advantage by providing guaranteed lifetime income, protecting against market volatility and outliving savings to secure financial stability in retirement.
- An annuity works by paying a premium to an insurer who then provides regular lifetime payments, using mortality pooling and portfolio backing for predictable income.
- Annuities help retirees transform home equity into reliable lifetime income, reducing financial anxiety and creating a better foundation for secure retirement years.
- Fixed-indexed annuities can tie interest to market indexes like the S&P 500 with caps and floors, offering some upside while protecting against losses.
Impact - Why it Matters
This news matters because it highlights a critical evolution in retirement planning that directly impacts financial security for millions. With Social Security facing long-term sustainability questions and market volatility creating uncertainty, annuities offer a solution to the growing fear of outliving savings—a concern nearly half of retirees share. The shift toward using home equity and other assets to fund annuities transforms one-time windfalls into lifelong income streams, addressing longevity risk that traditional investments often fail to cover. For individuals, this means greater predictability in retirement, reduced tax burdens through deferral strategies, and a safeguard against unexpected life events like early layoffs. On a broader scale, this trend could reduce reliance on social safety nets and promote more resilient retirement ecosystems, making it essential reading for anyone planning their financial future.
Summary
A significant shift is underway in American retirement planning, with more individuals moving away from relying solely on Social Security or traditional 401(k)s toward securing guaranteed lifetime income through annuities. According to recent industry data, U.S. individual annuity considerations surged by 21.5% in 2023, reaching approximately $347.7 billion. This trend is driven by escalating concerns about market volatility, fear of outliving savings, and waning confidence in Social Security's long-term sustainability. As Americans downsize their homes and free up equity, they are increasingly directing that capital into annuities as a foundational piece of retirement planning, transforming one-time events like home sales into predictable paychecks for life.
Annuities function by having individuals pay a premium—either as a lump sum or through periodic payments—in exchange for the insurance company's agreement to make regular payments for life, potentially including a spouse. These payments, backed by the insurer's portfolio and mortality pooling, deliver crucial predictability. Gary Jensen, CFP® and Chief Analyst at Annuityverse, emphasizes that recent layoffs highlight how retirement can arrive unexpectedly, making advance planning essential. He recommends owning a deferred income annuity, ideally funded in one's 50s, to provide an income baseline alongside Social Security, creating a foundation that offers both lifetime income guarantees and flexibility to adapt to life's curveballs.
Tax advantages also make annuities appealing, as certain structures allow tax-deferral of interest accumulation until payout, reducing tax drag during accumulation. Furthermore, annuities address longevity risk by transferring the risk of outliving savings to the insurer, providing a guaranteed income floor to cover basic retirement essentials. Market studies note exceptional growth in fixed-rate deferred annuities and fixed-indexed annuities in 2023, with mechanics involving stated interest rates or index-linked performance. This shift represents a fundamental rethinking of retirement security, offering Americans a way to mitigate financial uncertainties and ensure stable income throughout their golden years.
Source Statement
This curated news summary relied on content disributed by 24-7 Press Release. Read the original source here, Americans Shift to Annuities for Guaranteed Retirement Income
