By Marc Gilman
(800) 927-9326 |
Key Takeaways
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Annuity rates are elevated compared to a few years ago, driven by higher Treasury yields, competition among carriers, retiring baby boomer demand, and a wider variety of products on the market.
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Financial professionals point to a genuinely favorable combination right now: both equity markets and annuity rates being elevated at the same time, which doesn’t happen often.
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That said, experts are consistent on one point: a good rate environment isn’t a reason to buy an annuity that doesn’t fit your actual financial plan.
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Certain situations are common reasons to hold off — needing liquidity, a shorter expected retirement horizon, already having enough guaranteed income, or lacking emergency savings outside the annuity.
Why Are Annuity Rates Attractive Right Now?
Several forces are lining up at once. Rising Treasury yields have pushed up what insurers can offer, since annuity payouts correlate closely with the interest rate environment. Carriers are also competing hard for business while maintaining strong balance sheets, and the wave of retiring baby boomers has increased demand for guaranteed income products generally. On top of that, a wider variety of annuity products gives companies more room to price competitively for different types of buyers.
Mary Kay Sloan, a financial advisor with Prudential Advisors, has described current rates and income percentages as among the best she’s seen in her career. Elle Switzer, director of annuity product management at TruStage, points to record-setting quarterly sales figures as evidence that both advisors and clients are recognizing the current market’s appeal.
Is There a Case for Buying Now Specifically?
Some professionals see a genuinely rare combination at work: strong equity markets and elevated annuity rates happening at the same time, rather than one typically coming at the expense of the other. That combination lets people lock in strong account values from other investments while also securing better guaranteed income terms than they might find in a lower-rate environment.
Paz Rulli, vice president of annuities at Northwestern Mutual, connects this to the broader retirement landscape — people are living longer, and layering interest rate uncertainty and market volatility on top of that longevity makes a product built to manage risk more appealing than it might be in calmer conditions.
None of this means rates will only go one direction from here. Sloan is direct about the tradeoff: when interest rates eventually decline, future annuity rates will likely follow, meaning today’s terms may not be matched again for a while — but that’s a different statement than saying today’s terms are the only good deal you’ll ever see.
When Might It Make Sense to Wait or Pass Entirely?
The same experts who are bullish on today’s rate environment are equally direct about who shouldn’t be rushing toward an annuity purchase. Common reasons to hold off include:
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You might need access to the funds for liquidity — annuities generally aren’t a good fit if there’s a real chance you’ll need that money back before the term is up.
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Your health has declined in a way that shortens your expected retirement horizon.
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You already have enough guaranteed income from other sources.
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You don’t have enough set aside to fund the annuity premium without compromising your other financial needs.
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Your goals are short-term, or you don’t have separate liquid savings to cover unexpected expenses.
The consistent theme across these expert opinions: the decision should be driven by whether an annuity solves an actual need in your plan — protection, guaranteed income, or a specific funding goal — not by whether the current rate looks attractive in isolation.
Where Does This Connect to Long-Term Care Planning?
For some buyers, the specific need an annuity is solving is long-term care protection. If you’re considering an annuity with a long-term care rider, the same interest rate dynamics apply — a stronger crediting rate can mean a larger long-term care benefit pool by the time it’s needed, which is a good reason the current rate environment is worth a look if LTC protection is part of your goal. That’s a more specific and involved decision than a standard fixed annuity purchase, though, and it’s worth working through separately with the actual product details rather than assuming the general “rates are good” case applies the same way.
Where Does Insurance Planning Fit In?
Rate environments shift, and locking in a strong rate today is a reasonable consideration — but the product still has to fit your actual situation. An insurer’s financial strength matters as much as the headline rate for a commitment you may be making for years, and comparing options across multiple carriers is worth the time before committing to any one contract.
What To Do Next
If you want to understand whether today’s annuity rates actually make sense for your specific situation — including whether an LTC rider should be part of the conversation — Gilman Agency can walk through the options with you.
Call us at (800) 927-9326 or email to schedule a review.
Sources: Sharon Wu, “Are annuity rates good right now? Here’s what experts think,” CBS News / MoneyWatch (July 2025).
