My neighbor turned 66 in June and finally did the thing he had put off for years. He wrote one check to an insurance company. Then he came over to ask whether he had done something stupid.
He had company. Americans put $123.9 billion into annuities in the second quarter. That is the biggest quarter on record, and the eleventh in a row above $100 billion.
LIMRA, the insurance industry’s own research arm, counted it on July 27.
An annuity is a contract with an insurer. You hand over money now. The company pays it back later, on terms fixed the day you sign.
The schedule under that record is what holds my attention. More than 11,000 Americans turn 65 every day. That pace runs through 2027.
Almost none of them retire with a pension. So the job a pension used to do lands on one person at a kitchen table. Usually in one afternoon. Usually once.
Open that record up and it stops being one number.
$123.9 billion
Total US annuity sales, second quarter 2026, an all-time high (LIMRA, July 27)
$5.3 billion
The slice that buys income for life: immediate and deferred income annuities, each at a high of its own
Two records, printed the same morning. The line that actually pays a monthly check fits inside a rounding error.
The coverage stopped at the big number. The small line is where savings turn into a paycheck, and it is the one the cohort is still circling.
Your money does not sit in a vault while you decide. The insurer invests it long and pays you less than it earns. That gap is the whole business.
A lot of that investing has moved into private credit. That is lending done outside the public bond market, to borrowers who never issue a bond you could buy.
Economists at the Chicago Fed counted $849 billion of it on life insurers’ books in 2024. About 14% of everything they hold.
Their paper traces 61% of the market-share gains at private-equity-owned insurers to that one shift. The gains land in indexed annuities. Those credit interest tied to a stock index, with a floor underneath.
Where the cohort’s money sits this quarter, and the aisle that record is really shopping for.
This is where it touches you. The promise printed on the contract is worth what the company behind it is worth.
Every state runs a guaranty association for the day an insurer fails. Coverage usually stops near $250,000 of annuity value, and the terms are set state by state. Past that line you are a creditor with a claim.
Most contracts also charge you for leaving early, on a schedule that can run seven years or longer. So the floor comes with a door that locks for a while. Worth knowing before the pen comes out.
The arithmetic
Annuity sales: LIMRA US Individual Annuity Sales Survey, preliminary second-quarter 2026 results, released July 27, 2026. Total $123.9 billion, up 4% on the year, the eleventh straight quarter above $100 billion; first-half total $231.3 billion. Income annuities: single premium immediate annuities $4.0 billion, up 12% on the year; deferred income annuities $1.3 billion, up 5%. The survey covers 84% of the US annuity market. The 4 cents is Boomers Trade’s own arithmetic on those two LIMRA lines. Peak 65 pace: Alliance for Lifetime Income, Retirement Income Institute, roughly 4.1 million Americans turning 65 a year through 2027, more than 11,000 a day. Private credit on life insurers’ books, $849 billion in 2024 or about 14% of their assets, and the 61% market-share figure: Federal Reserve Bank of Chicago working paper 2025-09, Meisenzahl, Overpeck and Polacek, revised May 2026. Guaranty association coverage: National Organization of Life and Health Insurance Guaranty Associations; the common annuity limit is $250,000 in contract value, and limits and terms vary by state.
LIMRA prints the next count in late October, and the line I will be watching is the small one. If income annuities set another high, this cohort has started buying paychecks instead of floors. My neighbor did not do anything stupid. He bought back the thing his father’s employer used to hand over with the gold watch.
Andrew
Boomers Trade is written by someone getting older right alongside you, and watching who profits from it.
|
