Amid considerations in regards to the U.S. economy and the possibility of a recession, most retirement savers need some kind of assurance they will not outlive their nest eggs, current studies present.

As a outcome, demand for annuities, which provide a assured stream of month-to-month income like Social Security and pensions, has soared.

Now, greater than half, or 54%, of retirement savers are contemplating a kind of assured lifetime income, in keeping with a new survey by Morning Consult for the American Council of Life Insurers, or ACLI.

“Retirement savers are clearly involved about inflation and the general financial system,” mentioned Susan Neely, ACLI’s president and CEO.

The passage of the Secure Act additionally made it simpler for employers to supply annuities as one retirement financial savings plan possibility.

Going ahead, insurance coverage firms, asset managers and employers are shifting towards making these assured lifetime income choices extra broadly out there via 401(ok) and different outlined contribution plans.

Starting within the fall, Fidelity will let plan contributors convert a few of their retirement financial savings into an instantaneous income annuity to supply pension-like payments throughout retirement.

Fidelity Investments is the nation’s largest supplier of 401(k) plans. The monetary providers agency handles greater than 35 million retirement accounts in complete.

BlackRock and State Street Global Advisors, two of the most important asset managers, additionally introduced target-date funds with retirement income annuity choices.

“As Americans live longer and more healthy lives, their threat of outliving their financial savings is accelerating the ‘silent disaster’ of economic insecurity in retirement,” Mark McCombe, BlackRock’s chief shopper officer, mentioned in a assertion. 

“Having an annuity possibility while you retire is a good factor for people who find themselves not feeling assured,” mentioned Carolyn McClanahan, a licensed monetary planner and founding father of Life Planning Partners, based mostly in Jacksonville, Florida.

But with any annuity, ensure you are evaluating the choices and the charges, added McClanahan, who additionally is a member of CNBC’s Advisor Council. 

Annuity sales hit an all-time high within the first quarter of 2023, up roughly 50% from a 12 months in the past, in keeping with Limra, an insurance coverage business commerce group.

The annuity market has benefited from market volatility, considerations in regards to the banking sector and a potential recession, in addition to greater interest rates, which usually translate to insurers paying a higher return on funding, in keeping with Todd Giesing, assistant vice chairman of LIMRA’s annuity analysis.

“Certainly annuity payouts are a lot extra enticing now,” mentioned Keri Dogan, senior vice chairman of retirement options at Fidelity.

Dogan mentioned she expects the curiosity in annuities will proceed to develop “since you get a lot extra to your cash.”