Annuities in a time of market turmoil

May 12, 2022

Investors wary of increased market volatility and rising inflation are pouring billions into annuities. The Secure Retirement Institute reported that sales have hit the highest levels since 2008. Last year they were up $245 billion, up 16% from 2020 and they continue to grow at a steady pace. Investors looking for a balance of protection and growth have opted for these products. The most popular are fixed-index annuities. It’s a tax-deferred savings option that provides: guaranteed minimum returns; inflation protection, and a limit on losses during market downturns.

While fixed-index annuities are "fan favorites," there are several other types of annuities in the market including: deferred annuities; variable annuities; fixed index annuities, and immediate income annuities. These products vary from each other with respect to fees, tax considerations and the risks of annuities during a recession. Other considerations include various pros and the cons, how to shop for the right annuity for you, and how can an annuity supplement retirement income.