Guaranteed Income for Life? Here’s What You Need to Know About Annuities in 2025

What the numbers say

In 2024, Americans bought a record $434 billion worth of annuities — up 13% from the previous year. Fixed-rate annuities led the charge, thanks to strong interest rates.

Experts think sales may cool slightly after 2025 if rates drop again, but the demand for steady income isn’t going away. As people live longer and worry more about outliving their money, annuities fill an emotional gap — they give a sense of control.

Still, surveys show confusion is high. Only 19% of U.S. adults can correctly define what an annuity is. That’s a sign that people like the idea, but don’t fully understand what they’re buying.

Always ask these 5 questions before signing

1. What kind of annuity is this — fixed, variable, or indexed?

2. When do payments start, and for how long do they last?

3. What are the total fees and surrender charges?

4. What happens if I die early — does the money go to my family?

5. How strong is the company backing it?

If the agent can’t answer clearly, that’s your red flag. A trustworthy professional will explain every number and term in plain language.