Why More Clients Are Asking About Guaranteed Income Before They Ask About Market Growth

If you sit across the table from pre-retirees, you have probably noticed that the first question has changed. A generation ago, the opening question was usually some version of “What can this earn?” Today, more clients start with “What can I count on?”

That shift is showing up on every producer’s desk, whether you write annuities every week or only a few times a year. We look at why a guaranteed paycheck now carries so much weight, and what the shift means for your practice.

Why certainty seems to outweigh potential

Clients have not stopped valuing growth. What has changed is that the cost of being wrong has become lopsided.

During the accumulation years, a bad market can be absorbed. A client can keep working, keep contributing, and wait for a recovery. In retirement, those options disappear. The paychecks stop, but the bills do not, and withdrawals continue regardless of what the market is doing.

Timing makes it worse. A downturn in the first few years of retirement, while withdrawals are being taken, can do lasting damage that the same downturn ten years later would not. And no one knows how long the money must last. For a healthy 65-year-old couple, planning for one spouse to live into their 90s is prudent, not pessimistic. A shortfall at age 88 cannot be fixed by going back to work.



The result is an asymmetry. Extra growth improves a retirement that was already going to work. A shortfall can break a retirement that otherwise would have worked. When clients put a guaranteed paycheck first, they are not being timid. They are pricing that asymmetry correctly.

The floor used to come with the job

For earlier generations, much of the retirement paycheck was guaranteed by default. Social Security covered part of it, and an employer pension covered much of the rest. The client never had to decide whether to buy income for life. It simply arrived each month.



That structure has largely disappeared in the private sector. Defined benefit pensions have given way to 401(k)s and IRAs, which hand clients a lump sum instead of a paycheck. Those clients now carry the market risk, the timing risk, and the longevity risk that a pension plan used to carry for them.

The market has already voted for certainty

We do not need to speculate about whether consumers prefer a defined outcome over open-ended market risk. Annuity buyers have been answering that question with their premium dollars.



According to LIMRA, total U.S. annuity sales reached $432.4 billion in 2024, the third consecutive record year. That followed $310.6 billion in 2022 and $385.4 billion in 2023. Fixed indexed annuities, the chassis for most income riders sold today, set their own record of $126.8 billion in 2024.

Source: LIMRA U.S. Individual Annuity Sales Survey.

Higher interest rates explain part of the surge. Rates improved SPIA payout rates and made fixed products more competitive. But rates do not explain the whole story. Demographics do the rest: according to the Alliance for Lifetime Income, roughly 4.1 million Americans are turning 65 each year from 2024 through 2027, the largest such wave in U.S. history. Most of them arrive at retirement holding account balances rather than pensions.



The demand for a guaranteed floor did not go away when the pensions did. It moved. The question “What can I count on?” is, in many cases, a client asking for the pension they never got, and the sales data shows how many of them are acting on it.

Two ways to build a guaranteed floor

A single premium immediate annuity

is the simplest form of guaranteed income. The client exchanges a lump sum for payments that begin and continue at their discretion. The trade-off is the liquidity provided once the premium was converted or annuitized; the premium deposit is generally no longer accessible.

A guaranteed lifetime income rider

sits within a deferred annuity, often a fixed indexed annuity. The client keeps an account value and access to it, while the rider guarantees a lifetime withdrawal amount that can begin at a later time. Many riders grow an income base during a deferral period, thus waiting can raise the guaranteed paycheck. The trade-off is cost: rider charges and design features reduce efficiency compared with a SPIA.

Many cases use both. A SPIA can cover essential expenses starting today, while a rider-based contract secures a second income layer for later years. Either way, the client walks away with what they asked for: a paycheck that does not depend on the market.

What this shift asks of your back office

Certainty-first planning is more demanding to deliver than growth-first planning. A guarantee is only as strong as the carrier behind it, and payout rates, rider roll-ups, withdrawal percentages, and rider charges vary widely from one contract to the next. Product shelves and rates also change often, sometimes month to month. With sales at record levels, carriers are competing for market share, and the gap between the best and worst offer for the same client can be meaningful. That raises the stakes on the support behind your practice, whoever provides it.

A few questions worth keeping on hand:

• Can your support team quickly compare SPIA payout rates across multiple carriers for the same client and premium?

• Can they show the guaranteed income an income rider will actually produce at the client’s planned start age, not just the roll-up rate?

• Do they help you weigh carrier financial strength alongside the payout?
  

A next step, if it is useful

The move from “What can this earn?” to “What can I count on?” is not a passing phase. Three straight years of record annuity sales point in the same direction. Keep the questions above on hand for the next time you think about who supports your income business.

If it would help to compare notes on how guaranteed income cases are being designed today, whether with income riders, SPIAs, or both, the Titan team is glad to have that conversation. No contracting discussion is required.

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