We’re currently in a rare window of opportunity for annuities—one that advisors and clients should consider carefully. Since the Federal Reserve began raising interest rates in April 2022, annuity products have become more attractive. However, with potential rate cuts ahead, this favorable environment may not last long. Now is a good time to reassess annuity strategies and take advantage of stronger guarantees while they’re still available.

For clients who plan to draw income from their annuities within the next decade, today’s market offers a unique chance to secure stronger income guarantees than they’ve seen in years. Advisors who are thinking ahead know this is an ideal moment to review their clients’ annuity holdings—particularly fixed and fixed-indexed annuities, where today’s high-rate environment has led to some significant product improvements.

A Shift Began in April 2022

For years, low interest rates limited the value annuities could offer. Income riders and crediting rates were modest because the math simply didn’t support more. That changed in April 2022. As rates climbed, annuity carriers responded with:

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These enhancements have created a gap between older in-force contracts and what’s available today—one that advisors should explore for clients who expect to take income within 10 years.

Why It’s Important to Act Now

The current rate environment won’t last forever. Here’s why urgency matters:

Since annuity pricing is linked to long-term Treasury yields, a drop in yields will naturally lead to lower guaranteed benefits. The window to lock in these stronger guarantees is closing.

Revisit the Entire In-Force Block

Now is the time for a comprehensive review of clients’ existing annuity contracts—especially those intended to generate income within the next 10 years.

Too often, annuities are treated as “set it and forget it” assets. In reality, they deserve the same level of strategic oversight as investment portfolios. Clients’ income goals evolve, market conditions shift, and product offerings change—sometimes dramatically.

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Advisors need to offer a streamlined, product-agnostic review process. Our internal data shows that over 70% of older annuities underperform when income is the objective. A systematic, product-agnostic review process can uncover better options and deliver more value to clients—while creating a repeatable planning opportunity for advisors.

A Great Income Tool, but Not for Wealth Transfer

Annuities can be an excellent tool for retirement income, but they are not as efficient for wealth transfer. As an “Income in Respect of a Decedent” asset, annuities do not receive a step-up in basis at death, exposing heirs to ordinary income taxes on deferred gains.

For clients who want to leave money to the next generation, it might make more sense to consider other wealth transfer strategies while using annuities for what they do best: providing reliable, guaranteed income in retirement.

Unlock Potential in Dormant Assets

Plenty of clients are sitting on idle assets—cash in money markets, maturing CDs or conservative bond funds in IRAs. These funds often earn minimal returns and aren’t aligned with long-term income goals.

Reallocating these assets into annuities can provide:

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This is a smart way to turn dormant capital into a reliable income stream.

Advisors: Capitalize on the Planning Opportunity

This is a high-leverage moment for advisors to deepen client relationships, differentiate their value and uncover new business through thoughtful annuity reviews. By offering a complimentary annuity review across your client base, you can:

It’s not just about chasing yield—it’s about locking in long-term security before the market shifts again.

Final Thoughts

We haven’t seen an annuity environment this favorable in over a decade—and it won’t last. Advisors who act now can deliver stronger outcomes for their clients and position themselves as forward-thinking, planning-first professionals.

Let’s take advantage of this moment, working together to ensure clients are well-positioned for the future, before the window closes.