Why Are Annuity Purchases Ramping Up This Summer?

The weather isn’t the only thing reaching record highs this season. As inflation continues its historic rise, consumers are having to rethink their reliance on risky investments like stocks and cryptocurrencies as a way of generating retirement income. Many are choosing annuities as a more stable form of income generation without the low earning potential of bonds.

Why are annuities considered a safer bet in markets like the one we’re faced with today than other traditional forms of retirement income? Keep reading for a detailed look at why annuities are gaining popularity in the face of rising inflation.

What Makes Annuities So Popular Right Now?

The major trait of annuities that makes them a popular retirement investment is the fact that they provide a steady stream of income at a fixed value while also generating interest on top of that value.

A study by LIMRA and the Secure Retirement Institute estimated that guaranteed income investment sales will grow to be a $1 trillion-dollar industry by 2023. With the fluctuating market leaving financial futures uncertain, fixed annuity projects offer a solution that makes consumers feel safer and more stable in their post-work futures.

Anxiety over the availability and accessibility of a comfortable retirement income in the current economy is rampant among soon-to-be retirees. Too many American workers are unsure they’ll have enough money to live comfortably in retirement. Many retirees are afraid Social Security will run out or collapse by the time they retire, necessitating some other form of reliable, guaranteed income to see them through the latter years of their lives.

It’s these fears and realities that make annuities rising investments when it comes to one’s future.

The Correlation Between Annuities and Interest Rates

At Annuity Associates, we have a firm belief in the significance of the correlation between annuities and interest rates. Most of the time, higher interest rates lead to a more significant yield from annuity revenues. Therefore, consumers tend to favor purchasing annuities in periods when interest rates are high.

Annuities also increase in popularity when the stock market takes a downward turn, or during the onset of what’s called a “bear market.” Since fixed annuities pay out the same amount of income each month no matter what, they aren’t affected by changes in the stock market, making them a safer and more stable form of retirement income during periods of market insecurity.

In Conclusion

Do you have any questions about annuities or want more information about the different types of annuities available for purchase? Are you looking for a licensed expert who can go over your retirement planning strategies with you and offer advice and guidance? Annuity Associates has representatives all over the country, and we’re here to help you take control of your financial future.

When it comes to making decisions about your retirement income in these uncertain times, knowing what your options are is key. Contact Annuity Associates today to add a licensed financial professional to your retirement planning team.

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