Fixed annuity rates have been rising since 2022 and continue to be attractive, with some products offering rates as high as 6.8%. Current rates are the highest we’ve seen in decades, and with a fixed annuity, you can lock in a good rate of return for a guaranteed income that will stay with you for as long as you live. Only annuities provide guaranteed protection against the most devastating financial risk of all: outliving your retirement income. 

That critical concern doesn’t go away, no matter how low interest rates go. Consider that:

• Fewer than one in three Americans (31%) have any kind of guaranteed retirement pension beyond Social Security.
• 80% are anxious that their retirement savings may not provide enough income to live on when they retire.
• 60% do not expect their retirement income to last their lifetime.

Furthermore, your retirement portfolio may have to last a long time. According to the Social Security Administration, there is a 50% probability that a 60-year-old married couple will have at least one partner live until age 91.

Annuities enable you to do the following:
Guarantee a baseline income — Consider using annuities to lock in enough income to cover non-discretionary retirement expenses like shelter, food, transportation, long-term care insurance premiums and Medicare premiums, and deductibles. This way, no matter what happens in the market, you’ll know you have your basics covered.  

Protect against market volatility — A steady guaranteed retirement income can also help individuals better withstand stock market volatility. With your basic expenses covered by a guaranteed income, you may be less tempted to panic in the face of market volatility.

Your steady income from annuities also helps preserve the rest of your retirement portfolio. In the event of a stock market crash, you won’t have to sell assets at fire-sale prices just to fund your living expenses — a dangerous circumstance that investment professionals call “sequence-of-returns risk.”

Your annuity income will continue to come each month, regardless of stock market volatility. According to the Alliance for Lifetime Income, 65% of those who have protected their retirement income expect their financial security to last their lifetime. Depending on your situation, you can customize your annuities to provide additional benefits such as:

• Guaranteed cost-of-living benefits: This rider ensures your retirement income grows with inflation, providing more purchasing power in the future.
• Return of premium at death: This guarantees that your beneficiary will receive the total amount of premiums paid into the annuity, less any withdrawals, upon your death.
• Guaranteed lifetime income extending to a surviving spouse or dependent: These are known as joint and survivor annuities, which guarantee lifetime income to the primary annuitant and, upon their death, continues payments to a designated survivor, often a spouse, for the survivor’s life.
• Guaranteed minimum income benefits: This ensures a minimum income level, regardless of the annuity’s investment performance. It’s often offered with variable annuities.

Are Annuities Right for You?
Annuities may be appropriate for you if any of these apply:

• You are worried about a market crash.
• You want or need to guarantee a basic income for life.
• You don’t have a guaranteed pension other than Social Security.
• You are in good health and expect to live many years into retirement.
• You need to provide guaranteed income for a surviving spouse.
• You are in a high marginal tax bracket and want the benefit of tax-deferred growth.
• You want to protect assets against potential creditors.

The Takeaway
If you’re in the market for an annuity in 2025, it’s a good idea to shop around and compare all your options — and we can help with that.

We can help you compare interest rates, fees, and other important factors. We can also help you determine whether you’d be better off buying now or waiting.