RILAs Rising, FIAs Faltering—What Q1 Annuity Sales Reveal About the Future of Retirement Income Planning
If you're still leading client conversations with “guaranteed fixed rates” as your opening line, you're missing the seismic shift happening under your feet.
In Q1 2025, U.S. annuity sales hit $105.4 billion—yes, again surpassing $100 billion for the sixth consecutive quarter. But beneath the headline lies a tale of evolving investor psychology, market recalibration, and product Darwinism. Variable Annuities (VAs) and Registered Index-Linked Annuities (RILAs) are surging. Fixed annuities? They’re slipping—fast.
So, what’s driving this pivot, and how should ethical financial professionals respond?
The Market Pulse: Why These Numbers Matter
Let’s break down the numbers:
Total Annuity Sales (Q1 2025): $105.4B
RILAs: $17.5B (+21% YoY)
Traditional VAs: $15.6B (+14% YoY)
Fixed Indexed Annuities (FIAs): $26.7B (–7% YoY)
Fixed-Rate Deferred Annuities: $39.5B (–8% YoY)
SPIAs & DIAs: Flat to declining
This wasn’t just a one-off. This was the sixth straight quarter above $100B in sales—an endurance feat that signals fundamental change, not seasonal fluctuation.
So what’s changed?
Investor Behavior.
The S&P 500 soared, interest rates cooled just enough, and clients once shy about market exposure are now asking, “Why wouldn’t I want upside potential with some guardrails?”
The Professional Dilemma: Are You Selling What Illustrates or What Sustains?
Let’s get honest. Too many professionals are still pushing fixed annuities because they’re clean, simple, and easy to explain. But easy isn’t always right—and right now, the market is telling us the story has moved on.
RILAs and modern VAs are not just “complicated cousins” anymore. They’re often the best fit for clients who:
Are still a decade or more from retirement
Want inflation-sensitive growth without full market risk
Understand the value of structured outcomes
Yet the barrier for many advisors isn’t client interest—it’s advisor discomfort.
Three Critical Shifts You Must Make to Stay Relevant:
From “Guaranteed Yield” to “Protected Growth”
The market no longer rewards pure safety. We’ve shifted from a fear-based landscape (post-2020) to one of opportunity. That means RILAs and modern VAs are no longer niche—they’re foundational tools for accumulation and de-risking simultaneously.
From Static Planning to Dynamic Education
You can’t just drop a product in front of a client anymore. They’re Googling terms, watching YouTube breakdowns, and comparing illustrations. Advisors need to educate before they illustrate—especially with RILAs and VAs. Talk in terms of probabilities, trade-offs, and how the product performs under multiple scenarios.
From Salesmanship to Stewardship
Use these shifts as a reset. Ask yourself: Are my annuity recommendations designed to solve a client’s real retirement problem—or just close a sale? Ethics aren’t just a compliance box. They’re your long-term business strategy.
What the Decline in Fixed Annuities Really Means
Some will say the dip in FIAs and Fixed Deferred Annuities is just cyclical—a function of interest rate headwinds. That’s not wrong, but it’s also not the whole picture.
Here’s the truth: the market is rewarding adaptability.
In 2022-23, when rates shot up, fixed annuities were the rock stars. But as rates plateau and the S&P 500 keeps flirting with all-time highs, clients want more than a 4.5% guaranteed coupon. They want exposure—but not recklessness.
That’s why RILAs are thriving. That’s why VAs with improved fee structures and flexible riders are making a comeback. This isn’t about product loyalty—it’s about matching your client’s financial psychology to the right risk framework.
Ethical Lens: Consumer Benefit Must Stay Front and Center
Yes, we love annuities—but let’s love them honestly.
Too often, I see RILAs misrepresented as “safe” or VAs pitched as “stock market investments with a safety net.” These are half-truths that backfire.
RILAs come with loss potential. VAs need consistent oversight. Clients deserve clarity on how these products work, when they shine, and where they fall short.
Transparency is the new alpha. And it's your job to deliver it.
Practical Takeaways for Advisors:
Rethink your segmentation. Younger clients and pre-retirees are increasingly open to RILAs and accumulation VAs. Don’t default to term insurance and fixed annuities just because it’s “safe.”
Review your training. If you’re not confident presenting RILAs or VAs, invest in product training that focuses on structure, not sizzle. Look to carriers offering well-structured buffered outcomes, not just flashy bonuses.
Diversify annuity blends. Consider partial annuitization strategies that mix VAs, RILAs, and even SPIAs to balance growth, liquidity, and income.
Lead with planning, not product. The best way to introduce annuities? Start by solving for income gaps, inflation risk, and behavioral finance challenges. The product should follow—not lead.
Conclusion: The $105 Billion Question—Are You Evolving with the Market?
Annuity sales in Q1 2025 didn’t just reflect strong numbers—they revealed where client preferences, advisor strategy, and product innovation are converging. If you’re still clinging to the safe, fixed, “one-size-fits-all” approach, you’re missing the evolution—and your clients may pay the price.
Let’s do better. Let’s be the professionals who adapt with purpose, recommend with integrity, and educate with clarity.
Because it’s not about selling more annuities. It’s about selling the right annuity—at the right time—for the right reason.
