Once you retire full-time from your career, the paychecks stop, but an annuity can offer a way to still get a steady stream of guaranteed income after you are done working. And consumer interest in annuities has never been higher. Since 2022, annuities have repeatedly set new sales records year after year.1
A variety of factors are contributing to the surge in demand, from economic conditions to a shift in how consumers are financing their retirements. But before we get too in-depth, what are annuities, and why do people want them?
What is an annuity?
An annuity is a contract between you and an insurance company that states the company will send you regular payments (income) in return for your premium (money you used to buy the annuity). The time you begin receiving income depends on the type of annuity and the time period you select.
One of the simplest annuity models is our modern-day Social Security system. You contribute money via employment taxes during your working years and, in turn, receive inflation-adjusted monthly payments for life after you retire.2
Retirement products for uncertain times
A chief reason for surging annuity sales is the roller-coaster US economy of the past few years. It’s no surprise that the last annuity sales record was set in response to the global financial crisis of 2008, which put the US economy into an economic free-fall and led to the loss of $17 trillion in household wealth.3,4
Today, people are facing economic uncertainty, fears about Social Security funding, and worries about their retirement. According to our research, Americans’ top three financial stressors are related to retirement with nearly half of Americans saying they worry about having a source of guaranteed income in retirement.5 Given this, it’s no surprise more people are turning to annuities.
Stability amidst a changing retirement landscape
The traditional definition of retirement is changing as life expectancy increases, people work longer, and retirement income sources change. Traditional defined benefit pension plans used to be commonplace. At retirement, an employee received a lifetime annuity from their employer, typically based on years of service and final salary. But since 1980 the number of people with pensions has decreased by 60%, replaced by 401(k) plans funded by employee contributions.6 Money in a 401(k) plan can grow tax-free or tax-deferred depending on the plan, but contributions are limited by IRS rules.7,8
Annuities can be a good complement to a 401(k) plan for your retirement strategy because they offer more income distribution choices and are not subject to IRS contribution limits. You may be able to put as much money as you like into an annuity (subject to the insurer’s rules) and be assured of a guaranteed income stream during your retirement years. Based on your contract, you're able to determine the length of time during which you'll receive payments (e.g., for your lifetime or a specific number of years).
A major consideration with certain annuities is the lack of liquidity or on-going access to your premium. You may surrender an annuity at any time, but, depending on the contract, a surrender charge may be applied. Some annuities may also require an annual fee or fees for optional contract features.
With the shift from traditional pension plans to 401(k)s, annuities may offer a way to replicate that dependable income stream associated with pensions. This feature can help reassure people seeking financial stability amidst a changing retirement landscape.
Improved financial confidence
Perhaps the benefits of annuities lie in the financial confidence they can provide the policyholder. Retirees say their top two financial regrets are not saving enough and not starting to save sooner for retirement.9 But 78% of people who own an annuity say they’re on track with their retirement savings.10 And study after study has found that retirees with guaranteed income from annuities enjoy greater happiness, less stress, and even longer lives.11,12,13
Annuities can be a key retirement planning tool, but choosing the right type of policy and customizing it to your needs is a complex undertaking. I can help you explore your annuity options and help you to work with an insurance company that is financially stable.
Sources:
1 LIMRA: U.S. Annuity Sales Exceed $100 Billion for Seventh Consecutive Quarter, LIMRA, September 24, 2025, https://www.limra.com/en/newsroom/news-releases/2025/limra-u.s.-annuity-sales-exceed-%24100-billion-for-seventh-consecutive-quarter/
2 Wendy Connett, Social Security: Benefits for Retirees, Survivors, and Disabled Workers, Investopedia, September 19, 2025, https://www.investopedia.com/terms/s/socialsecurity.asp
3 LIMRA: Record Annuity Sales in 2022 Expected to Continue Into First Quarter 2023, LIMRA, March 8, 2023, https://www.limra.com/en/newsroom/news-releases/2023/limra-record-annuity-sales-in-2022-expected-to-continue-into-first-quarter-2023/
4 Lessons From the 2008 Financial Crisis, Investopedia, September 12, 2023 , https://www.investopedia.com/news/10-years-later-lessons-financial-crisis/#citation-29
5 Mind, Body, and Wallet® 2025, Guardian’s 14th Annual Workplace Benefits Study
6 Jeanne Sahadi, Traditional pension plans are pretty rare. But here’s who still has them and how they work, CNN Business, September 7, 2023, https://edition.cnn.com/2023/09/07/success/pensions-retirement-savings-explained/index.html
7 401(k) Plan Overview, IRS, August 26, 2025, https://www.irs.gov/retirement-plans/plan-sponsor/401k-plan-overview
8 Retirement topics: 401(k) and profit-sharing plan contribution limits, IRS, August 26, 2025, https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-401k-and-profit-sharing-plan-contribution-limits
9 Retirement Redefined, Guardian’s 14th Annual Workplace Benefits Study, 2025, https://www.guardianlife.com/reports/retirement-redefined
10 ibid.
11 Panis, Constantijn (Stan), Annuities and Retirement Satisfaction, RAND Corporation, 2003, https://www.rand.org/pubs/drafts/DRU3021.html
12 Retirees with an annuity enjoy greater life satisfaction and fewer affordability struggles, L&G, November 11, 2024, https://group.legalandgeneral.com/en/newsroom/press-releases/retirees-with-an-annuity-enjoy-greater-life-satisfaction-and-fewer-affordability-struggles
13 Ken Nuss, Retirees with a Guaranteed Income Are Happier, Live Longer, Kiplinger, December 24, 2020, https://www.kiplinger.com/retirement/annuities/601986/retirees-with-a-guaranteed-income-are-happier-live-longer
Disclaimer:
Registered index-linked annuities (RILA) and variable annuities (VA) are long-term investment vehicles that involve certain risks, including possible loss of the principal amount invested. The investment return and principal value may fluctuate so that the investment, when redeemed, may be worth more or less than the original cost. Withdrawals of taxable amounts will be subject to ordinary income tax and possible mandatory federal income tax withholding. If taken prior to age 59½, a 10% IRS penalty may also apply. Withdrawals affect the variable annuity’s death benefit, cash surrender value, and any living benefit and may also be subject to a contingent deferred sales charge.
RILAs, VAs, and VAs underlying variable investment options are sold by prospectus only. Prospectuses contain important information, including fees and expenses. Please read the prospectus carefully before investing or sending money. You should consider the investment objectives, risks, fees, and charges of the investment company carefully before investing. Please contact your investment professional or call 800.221.3253 for a prospectus, which contains this and other important information. To download a contract or fund prospectus, please click here.
Annuity guarantees are backed exclusively by the strength and claims-paying ability of The Guardian Insurance & Annuity Company, Inc. (GIAC) and are issued by The Guardian Insurance & Annuity Company, Inc. (GIAC), a Delaware corporation. Individual variable annuities are distributed by Park Avenue Securities LLC (PAS). GIAC is a wholly owned subsidiary of The Guardian Life Insurance Company of America (Guardian). PAS is a wholly owned subsidiary of GIAC. Guardian, GIAC, and PAS are located at 10 Hudson Yards NY, NY 10001. Contract provisions and investment options vary by state. PAS is a member FINRA, SIPC
All investments contain risk and may lose value. Diversification does not guarantee profit or protect against market loss.
This material is intended for general public use. By providing this content, The Guardian Life Insurance Company of America, and their affiliates and subsidiaries are not undertaking to provide advice or recommendations for any specific individual or situation, or to otherwise act in a fiduciary capacity. Please contact a financial professional for guidance and information that is specific to your individual situation. Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, medical, or financial advice. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, medical, or finance advice. Consult your tax, legal, medical, or finance professional regarding your individual situation.
8677742.1 Exp.12/27 *pre-approved content*