In honor of Annuity Awareness Month, Bob from VIBE sat down with Dan Chuka, National Account Manager at AMS, to explore key trends and strategies driving today’s annuity conversations.
Key Takeaways:
Massive Demographic Shift
With 11,400 Americans turning 65 daily, the need for retirement planning tools – especially those offering guaranteed income – is greater than ever. By 2050, over 20% of the population will be over age 65.
Surging Annuity Sales
The annuity market continues to break records, with $434 billion in sales in 2024. Fixed annuities, particularly MYGAs (multi-year guaranteed annuities), remain the dominant product due to competitive rates and predictable returns.
Shift Toward Income and Inflation Protection
Clients are moving from pure accumulation to guaranteed income options. Fixed Index Annuities (FIAs) with income riders are especially popular, offering growth potential, income guarantees, and access to assets – unlike SPIAs, which lock up funds permanently.
Safe Money Alternatives to CDs
Traditional 3-year CDs are averaging just 1.71%, whereas MYGAs offer rates closer to 5%, plus tax deferral. As clients become more financially savvy, annuities are increasingly viewed as a smarter safe money strategy.
Addressing Long-Term Care Risk
New hybrid annuities offer enhanced long-term care benefits, sometimes 2–3x the original investment, while still providing death benefits if unused. These solutions are easier to qualify for and offer flexibility compared to traditional LTC insurance.
Unlocking Gains with the Pension Protection Act
Thanks to changes in tax law, clients can now move annuities with gains into long-term care annuities and avoid taxes on those gains – a powerful planning strategy for clients 65+.
Huge Maturity Opportunity in 2025
$63 billion in annuities are maturing this year – most from 3-year MYGAs sold in 2022 at lower rates. Producers should proactively reach out to clients to reposition those assets into higher-yielding or income-generating options.
Bottom Line:
With aging demographics, tax advantages, and growing consumer awareness, annuities are more relevant than ever. Producers who ask the right questions, like “What are you doing with your safe money?”, can unlock massive opportunities in today’s market.
