Investors have grown increasingly concerned about market volatility and rising inflation, so it should be no surprise that they flocked to annuities in 2021. In fact, total US annuity sales in 2021 reached their third-highest level ever recorded (and their highest levels since 2008), according to the Secure Retirement Institute (SRI). And fixed annuity sales increased 7% to $129.3 billion.
The second quarter of 2022 got off to a bumpy start. Equities were sold off as the US Federal Reserve hiked interest rates. Although the policymakers considered these hikes necessary to stave off uncomfortably high inflation, they could also lead to an economic slowdown (or even recession). Many markets experienced their worst day since June 2020, and pundits are now talking about an official bear market.
Fixed annuities may fit the bill in this environment. With a fixed annuity, you give an insurance company a sum of money, and in exchange, it gives you a guaranteed income stream in retirement. This provides Americans seeking a measure of security in retirement the ability to sleep well at night.
Plus, the money that you invest in a fixed annuity grows tax-deferred until withdrawal, meaning it compounds over time. This is another benefit of these investment vehicles.
Of course, annuities aren't for everyone. We can help you decide if one is right for you and, if so, choose one that meets your needs. If you would like to consider a fixed annuity in these trying times, please call or email us to determine your best options.