Some wanted the Fed to cut rates this week to spur growth; others wanted a hike to fight inflation. But one group that probably won’t mind rates holding steady is retirees shopping for annuities.

Higher rates can challenge consumers and economies, but they also let annuity carriers offer higher caps and more attractive yields on fixed and fixed-index products. The rate environment has been so favorable for annuity sales that US distribution has set consecutive annual records since 2022, per Limra Secure Retirement Institute data. The composition of those sales looks very different from a decade ago, however, giving advisors an incentive to study up on the annuity playbook.

“Higher rates have absolutely changed the annuity conversation,” said Patrick Huey, founder of Victory Independent Planning. “Clients have meaningfully better choices than a few years ago.”

Fixed for the Win

The near-zero-rate world that prevailed after the 2008 Great Recession limited what insurers could offer in guaranteed rates, caps, payout factors and income features. Now, carriers have more room to work, and fixed annuities can be more attractive than variable products for many shoppers. Industry data backs that up:

• Fixed-rate annuity sales more than tripled in terms of total assets between 2021 and 2025, per data from Limra reported by the Institute of Business & Finance.
• Fixed-indexed annuity sales surpassed $125 billion in 2025, behind only fixed-rate annuities, at $161 billion.

“Some clients who bought in the low-rate era are now holding products that may no longer be especially competitive,” Huey said. “If a contract’s income rider is outdated, fees are heavy or crediting terms have been eclipsed by newer offerings, this is a great time to review.”

This year has been the fifth consecutive one in which Brad Pistole’s clients made at least $30 million in annuity placements.

“Interest rates have helped,” said Pistole, CEO of Ozarks Retirement Group. “But I think some of the recent interest also comes from bumps and questions in the equity markets, which have sparked interest in protection.”

While most of the annuities he writes these days are fixed, another category sparking interest (if not actual sales) is qualified longevity annuity contracts, he said. “Folks are getting older, and they’re realizing that after a very long bull market run, their future required minimum distributions are going to be significant,” he said. Qualified longevity annuity contracts “can help with that because they directly reduce RMDs.”

Future Problems. Rates may not go down soon, but the present is an opportunity to lock in gains, said Dave Byrnes, chief distribution officer at Security Benefit.

“For advisors with clients in or nearing retirement, they may want to consider how much of these portfolios should still be exposed to equities and what alternatives are available,” he said.

D’s may (sometimes) get degrees, but they don’t mean you’re well-prepared. Many Americans well beyond their school days may soon learn that the hard way.

People are living longer than ever, but longevity preparedness is at an average of just 60 out of 100, according to John Hancock and the MIT AgeLab’s 2026 Longevity Preparedness Index released this week. The benchmark measures how ready Americans are to live longer, healthier and overall better lives across eight domains of aging. While respondents were most prepared when it comes to community and social connection, they scored just 71 and 69 in those domains, respectively. Respondents scored 63 out of 100 for financial preparedness. Care, home and health domains show the greatest need for more prep.

“Living longer is great, but quality of life matters just as much,” said Megan Slatter, wealth advisor at Crewe Advisors. “Good planning isn’t just about making sure your money lasts, it’s about maintaining your independence, having choices and enjoying those longer years.”

Study Up

When it comes to longevity, there are many unknowns and misconceptions, which can make preparing challenging:

• “Americans have a general understanding of average life expectancy, but they don’t know what that means,” said Craig Copeland, director of wealth benefits research at the Employee Benefit Research Institute. Some people are going to live much longer than the average, he added.
• Prices of healthcare services are not well understood, let alone additional needs that can impact older people, like help with mobility or maintaining a home, he said.
• Future retirees and families spend so much time focusing on having enough money for retirement that they often overlook what their life might actually look like as they get older, like where they will live and who will care for them, Slatter said.

Cut the Procrastination. But issues like long-term care and housing are much easier to plan for when clients are healthy and have options, said Kelly Regan, vice president at Girard, a Univest Wealth Division. “While uncomfortable to some, an advisor can help clients think through those decisions years in advance and incorporate the potential costs into their financial plan.”

Avoiding all risk can be the riskiest choice of all, and one target-date fund provider seems to have taken that to heart.

Last week, Vanguard announced a forthcoming target-date series with higher equity allocations compared with its existing options. The Vanguard Target Retirement Growth Trusts will start at 95% equity and gradually fall to 50% at and through retirement. The news has triggered discussion about what the optimal equity allocation might be. There’s not necessarily a single correct answer. Instead, investors and their advisors should make sure they understand exactly how much risk is being taken and why.

Relative Performance

Retirement researcher Michael Finke has studied the evolution of glidepaths and wasn’t surprised to see Vanguard’s move, in the context of a 15-year bull market.

“Any measure of historical performance was essentially determined by the slope of the glidepath, and companies like Vanguard, with relatively conservative glidepaths, appeared to be lagging,” Finke said. A look at risk-adjusted returns tells a different story, but many investors focus on top-line performance.

“The lower equity allocations in TDFs were always meant to be appropriate for a base-case type of [investor] who was risk averse and who had a modest account balance,” Finke said. “Of course, the opposite would have been true in 2010, when target-date funds with the least aggressive glidepaths would have had the best 10-year performance.”

Older investors seem to have a high appetite for equities when they enter retirement, per data from the Employee Benefit Research Institute:

• Among 401(k) participants in their 60s who exited target-date funds, 47% increased their equity allocation by 20% or more, while 32% decreased it by 20% or more.
• At the same time, older 401(k) investors display a wider array of allocations to equities both before and after moving away from TDFs, which suggests they appreciate the flexibility to customize their portfolios.

Running Risks. The returns an investor gets in the five years before retirement have the biggest impact on the income they can create from retirement investments, according to research Finke has collaborated on.

“A big loss right before retirement could have a devastating impact on a retiree’s expected lifestyle,” he said. “It is one of the reasons that I tend to think that more conservative glide paths are best for default investments. … One has to ask whether it makes sense for near-retirees to take more risk when the expected upside is so low and the downside is so consequential.”