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Savvy consumers looking for a secure income stream to supplement their Social Security in retirement have been increasingly turning in recent years to annuities, the only product in the private marketplace that provides guaranteed lifetime income like a traditional pension.
In the first half of 2025, consumers purchased a record $226.1 billion in annuities, according to LIMRA, which is on track to surpass last year’s record of $432.4 billion in annuities, the third consecutive year of record annuity purchases.
Savers from all income levels are benefiting from the guaranteed lifetime income from annuities. The median income of annuity-owning households is $76,000 a year. Recent research from economists Mark Warshawsky and Gaobo Pang finds that retirees who fully or partially annuitize their retirement savings fare better in retirement outcomes than those who opt for the traditional strategy of annual withdrawals of 4 percent. In fact, people retiring with savings of less than $250,000 would benefit most from annuitizing higher portions of their retirement savings, if not all of it.
Annuities not only help people manage their finances and achieve a secure retirement; they also help the federal government manage its finances. Annuities provide people with a steady income flow to handle their basic expenses, lessening the burden on their other savings. This allows many to delay claiming Social Security benefits, which ACLI estimates will result in $100 billion in savings for the federal government over time.
With 20 million Americans turning 65 between now and 2030, it is important that public policy continues to support savers’ access to annuities.
Jim Szostek
Jim Szostek is Vice President & Deputy, Retirement Security at the American Council of Life Insurers (ACLI). He helps guide ACLI policy on legislation and regulations affecting the U.S. retirement system. Prior to joining ACLI in 2008, he held positions at CIGNA and The Hartford.
