Annuities May Support Clarity in Economic Uncertainty

August 4, 2023

including annuities in financial planning discussions between financial professionals and their clients may prove valuable — especially in the current economic environment.

In this uncertain economy, annuity sales are booming. Investors seeking investment protection and guaranteed growth contributed to $310.6 billion in annuity sales in 2022, topping the record set in 2008. That’s according to Todd Giesing, assistant vice president of LIMRA Annuity Research1 who predicts “protection products” will continue to boost growth in the annuity market for the next several years.2

Jackson’s research supports the popularity of these flexible retirement products and affirms annuities are common among retirement investors.* Not only do nearly half of financial professionals — mostly those who are more experienced — find them more appealing than in the past decade, our survey results show, but investors who don’t own one are most likely to believe there’s a significant risk to preserving past investment gains and ensuring sufficient retirement income.

It’s notable that one-quarter of investors surveyed report owning an annuity mostly because their financial professional recommended one or because they wanted sufficient retirement income.

This brings up two critical points. First, investors usually learn about and purchase annuities with guidance from their financial professionals. The second is that while annuities are commonly known as a potential source of reliable retirement income, they can provide several other benefits, often available for an additional fee, that investors may not be aware of but find desirable in uncertain times. 

The takeaway is that including annuities in financial planning discussions between financial professionals and their clients may prove valuable — especially in the current economic environment. It’s important to note that annuities can include fees and expenses, and, like all financial products, they carry some risk. Investors should always consult with a financial professional to determine if an annuity is right for their specific financial situation and investment goals. 

Investors’ focus: Protecting savings, ensuring income

Jackson’s research shows that protecting previous investment gains tops investors’ list of concerns, followed by not having sufficient retirement income. It’s notable that among investors surveyed, those who are most likely to believe there’s significant risk attached to these two retirement goals tend to not have an annuity or pension. And, while nearly half of the retirement savers who responded feel holding money in cash is more appealing now than in the past decade, the appeal of annuities has not changed for them in this time. 

What some investors may not know without professional guidance is that purchasing a fixed annuity can offer the advantage of preserving their assets at interest rates that are generally better than bank CDs, although annuities are usually longer-term products.3 In fact, LIMRA credits fluctuating interest rates in the fourth quarter of 2022 prompting investors to lock in higher annuity crediting and payout rates for fixed annuities.4

Regarding the desire to ensure income, annuities can provide guaranteed income for a specified time or for life with the addition of an optional rider available for a fee. They also offer tax-deferred† growth, meaning earnings are not taxed until withdrawn, possibly helping savings grow more quickly. And because fixed annuities offer guaranteed interest rates, they are not subject to market fluctuations. 

Learn how others are addressing key retirement concerns in challenging times.

Market volatility, inflation, and banking system turmoil are all part of the economic uncertainty we see today. Jackson asked investors and financial professionals for their top concerns and leading strategies for navigating this challenging environment. See what they told us and how attitudes toward investing may be changing.

Retirement savers are uncomfortable with risk and market volatility

On the topic of markets, our research finds that 31% of financial professionals surveyed favor annuities as a strategy against market volatility. It also shows that half of investors are unwilling to take on risk and most are very uncomfortable with fluctuations in the market. Yet there are investors who would like to maintain some level of market exposure without risking their retirement nest egg. Annuities may help, depending on an investor’s unique situation. 

Registered index-linked annuities (RILAs), for example, give policyholders the ability to choose how to prioritize growth opportunities and limit the amount of risk they’re willing to accept. Growth is measured by the return of a market index and policyholders determine the level of protection they need to help cover them during small or large market downturns. RILAs are insurance contracts and because the risk of loss is present, they are registered securities products.

For more conservative investors, a fixed index annuity (FIA) is like a RILA, only with more downside protection and less upside potential. FIAs are designed to provide investors with a guaranteed minimum return with the potential for higher returns based on the performance of a specific stock market index like the S&P 500. Key benefits are that an FIA provides a degree of protection against market downturns and guarantees an investor’s principal investment will not decrease in value.

FIAs may come with fees and other charges and can limit how often investors access their money. Also, index earnings are usually capped — meaning investors only receive a portion of the gains — and indexing strategies can be complex. These and other factors make careful communication between financial professionals and their clients necessary to help ensure clients have reasonable expectations.

Variable annuities (VAs) also offer market exposure, only through direct investment in sub-accounts. While VAs have higher growth potential, they also have higher risk than other annuities, and payouts are dependent on performance of the investment options. Optional retirement income insurance can add to the overall cost of a VA, but the features can soften the impact of market losses and ensure predictable income insulated from market volatility.

As with any financial product, different types of annuities may be right in certain circumstances. Through careful consultation with a trusted financial professional, investors can determine if an annuity that offers equity exposure and a high level of protection against market downturns is right for them. 

Seeking protection against inflation

There is a broad range of annuities available today that offer more choices and greater flexibility to address changing economic conditions. It’s not surprising that financial professionals surveyed rank annuities in their top five choices for protecting against prolonged, elevated inflation. The predictable guaranteed income stream they can provide can be especially valuable when inflation is high and other investments may be volatile.

As retirement researcher Wade Pfau notes regarding annuities and inflation, “The lower withdrawal rate from investments that corresponds to using an annuity with level payments can help assets to grow and to better manage risks related to market volatility.”5

The heightened economic insecurity we’re all experiencing only reinforces the value an annuity can provide. Not only may annuities help investors manage their portfolios through extreme market volatility and continuing high inflation, but they can help reduce the risk of running out of money.

Annuities are long-term, tax-deferred vehicles designed for retirement. Variable annuities involve investment risk and may lose value. Earnings are taxable as ordinary income when distributed. Individuals may be subject to a 10% additional tax for withdrawals before age 59½ unless an exception to the tax is met.

*Jackson’s Perspectives on Economic Uncertainty study, conducted in partnership with Advanis, surveyed 253 investors between 50 and 80 years of age, retired or within 10 years of retiring, with investable assets of at least $200,000, familiarity with financial products, and retirement income in addition to Social Security. Additionally, 150 financial professionals with two or more years of experience at a firm with at least $25 million in assets under management were surveyed. Surveys were conducted online from Oct. 13 to Nov. 1, 2022. 

Guarantees are subject to the claims-paying ability of the issuing insurance company. 

Tax deferral offers no additional value if an annuity is used to fund a qualified plan, such as a 401(k) or IRA. It also may not be available if the annuity is owned by a legal entity such as a corporation or certain types of trusts. 


1. LIMRA, “LIMRA: 2022 U.S. Retail Annuity Sales Shatter Annual Sales Records Set in 2008,” January 26, 2023.

2. Ibid.

3. LIMRA, "LIMRA: Another Record-Breaking Quarter for U.S. Annuity Sales," May 2, 2023.

4. LIMRA, “LIMRA: 2022 U.S. Retail Annuity Sales Shatter Annual Sales Records Set in 2008,” Jan. 26, 2023.

5. Protected Lifetime Income, Alliance for Lifetime Income, “How Can Help Retirees Protect Against Inflation,” March 28, 2023.


Before investing, investors should carefully consider the investment objectives, risks, charges, and expenses of the variable annuity and its underlying investment options. The current contract prospectus and underlying fund prospectuses provide this and other important information. Please contact your financial professional or the Company to obtain the prospectuses. Please read the prospectuses carefully before investing or sending money.

Jackson, its distributors, and their respective representatives do not provide tax, accounting, or legal advice. Any tax statements contained herein were not intended or written to be used and cannot be used for the purpose of avoiding U.S. federal, state, or local tax penalties. Tax laws are complicated and subject to change. Tax results may depend on each taxpayer’s individual set of facts and circumstances. You should rely on your own independent advisors as to any tax, accounting, or legal statements made herein.

Annuities are issued by Jackson National Life Insurance Company® (Home Office: Lansing, Michigan) and in New York, by Jackson National Life Insurance Company of New York® (Home Office: Purchase, New York).  Annuities are distributed by Jackson National Life Distributors LLC, member FINRA. These contracts have limitations and restrictions. Jackson issues other annuities with similar features, benefits, limitations, and charges. Contact Jackson for more information.

Jackson® is the marketing name for Jackson Financial Inc., Jackson National Life Insurance Company®,  and Jackson National Life Insurance Company of New York®. Jackson National Life Distributors LLC.