It’s been a quiet few years for variable annuities. Today, however, with interest rates drifting lower, they’re becoming more relevant and more saleable. After a multi-year decline, 2024 VA sales jumped to $60 billion—a 20% year-over-year increase. While RILAs remain the current golden child, this uptick in VA sales is a reminder that these products still have a place—especially for clients looking for long-term income strategies with equity exposure.
As yields soften, investors are rethinking how they generate retirement income. Fixed annuities and MYGAs lose appeal when locked-in rates don’t keep up with inflation or long-term growth. VAs—particularly those with guaranteed income riders—offer something different: access to upside in equities while still providing income stability in retirement.
The timing matters. We are already into the “Peak 65” boom, with a record number of Americans hitting retirement age between 2024 and 2027. This generation isn’t just looking for guarantees—they also need growth to sustain long lives and long retirements.
This shift creates a window for IFAs to revisit VAs with both new and existing clients. Recent product improvements—lower fees, fee-based structures, more transparent subaccounts—make it easier to position VAs as a component of a broader retirement plan.
VAs can be particularly attractive to clients who’ve already maxed out tax-deferred options. For those looking to replace a pension, they can serve as a personalized income chassis, with flexibility around timing and withdrawal. In particular, clients who are concerned about outliving their assets may find value in guaranteed lifetime withdrawal benefits (GLWBs), especially those tied to equity performance rather than fixed rates.
Advisors competing with robo platforms or fee-only firms can also use VAs to stand out with outcome-based planning. You’re not just selling a product—you’re delivering protected income that adjusts with life’s curveballs. In a market where many investors are uncertain whether to stick or twist, VAs offer an option a level up from RILAs—growth potential with downside limits and predictable income. A little more risk with the chance of greater reward.
Another opportunity lies in repositioning legacy contracts. Many clients hold older VA products that may not have been reviewed in years. A contract audit could uncover fees that are no longer competitive—or benefits that can be preserved while modernizing the structure. This gives producers a reason to reach out and deepen the relationship, even if there’s no immediate sale.
VAs do come with added complexity, which can make overcoming objections more challenging. What’s changed is the framing. Advisors who lead with “how this helps you retire better” rather than “how this product works” will have more success. Focus on client needs: longevity protection, market participation, predictable income.
Today’s VA landscape is broad, and advisors need to be selective. Some contracts are more transparent than others. Understanding a client’s risk tolerance will be key to making the case.
This isn’t a gold rush just yet, but it is a moment worth noting. With ongoing economic uncertainty, the window may be narrow. But variable annuities are re-entering the conversation for good reason. For the right client, in the right context, they offer something that few other tools can: significant long-term growth potential with built-in income guardrails.