It seems like yesterday when I think about it.
In 2008, Wall Street was on fire — in the worst possible way. Watching the market bleed red, I sat glued to my computer screen. It felt like the entire financial world was imploding, with the Dow down nearly 18% and the S&P 500 plunged over 20%. It was the worst day on Wall Street since 1987.
There was no denying the shock. And, the anxiety was a physical weight.
But the real gut punch was not the hit to my own accounts — that’s the price of admission in investing. Watching my clients suffer was what tore me up.
It suddenly became impossible for people who were months away from retiring to do so. Some retirees were panicking, wondering whether they would have to return to work.
Rather than traveling or spoiling the grandkids, their freedom dreams were replaced with sleepless nights and spreadsheets full of red numbers.
They weren’t afraid of market volatility anymore. They were afraid of running out of money.
From Market Euphoria to Income Anxiety
In the years before 2008, my clients were confident. In addition to having balanced portfolios and pensions, they also believed that Social Security was bulletproof. As such, when I even mentioned the word “annuity,” they looked at me like I had insulted their intelligence.
At the time, their logic made sense;
- Pensions guaranteed their income.
- Social Security was strong.
- Historically, the market has bounced back.
And annuities? In the past, they were regarded as too complicated, too opaque, and sold for the wrong reasons.
But here’s the truth: annuities aren’t the bad guys. It’s a tool. By using it correctly, it can solve one of retirement’s biggest problems — the fear of outliving your savings.
After that realization, I changed the way I helped clients plan for retirement. And now, in 2025, it’s more relevant than ever.
The 2025 Retirement Reality Check
Today, the financial landscape is much different from it was 15 years ago.
We’ve survived a global pandemic, persistent inflation, interest rate chaos, and constant market swings. The economy feels like a roller coaster you can’t get off.
The Social Security squeeze.
As the 2025 Social Security Trustees Report confirmed, the retirement trust fund is expected to run out around 2033. As a result, benefits could be reduced by 23% automatically — unless Congress acts.
This isn’t some far-away future headline — it’s less than a decade away.
The great anxiety.
In surveys, 64% of Americans express a greater fear than death itself of outliving their money. And honestly? I don’t blame them.
Market instability, inflation nibbling away at every dollar, and Social Security on shaky ground make retirees nervous. Increasingly, people are delaying retirement or working part-time because they feel compelled to.
This is why we have different financial conversations today. Clients aren’t chasing high returns anymore. Instead, they want stability, predictability, and peace of mind.
More importantly, no matter what the market does, they need a paycheck they can count on.
Annuities: The Comeback Kid of Retirement Planning
This brings us back to annuities, a once-disregarded investment vehicle.
Essentially, annuities are simple: you pay an insurer a lump sum, and in return, they promise to pay you a regular income for the rest of your life. It’s like building your own private pension.
In 2025, that concept will be more relevant.
Beating the longevity risk.
We are living longer than ever before. That’s great news, as long as your money lasts.
An annuity with a Lifetime Income Rider can guarantee you an income for your entire life. There’s no guesswork, no dependence on the market. You’ll remain secure knowing your essential expenses will be covered, regardless of how many birthdays you celebrate.
Everything changes when you gain confidence. Instead of constantly worrying about your balance, you can enjoy your retirement.
Protecting against market mayhem.
Another market correction will inevitably occur. It always does.
When you retire, however, you don’t have 10 or 15 years to wait for your retirement fund to recover. As a result, more retirees are turning to Fixed Indexed Annuities (FIAs) and Multi-Year Guaranteed Annuities (MYGAs) to protect their principal and earn modest, tax-deferred growth.
In fact, FIAs sales totaled $125.5 billion in 2024, up 31% from 2023. Additionally, MYGA sales increased by 20.8% in the first quarter of 2025 when compared to the previous quarter.
Think of them as a sturdy income floor under your more aggressive investments. In the event of a market decline, your core income does not suffer.
Replacing the vanishing pension.
Pensions used to be the backbone of retirement. Now, they’re practically extinct.
In addition to Social Security, an annuity can provide a predictable, guaranteed income source.
With guaranteed income covering your essential expenses, your investment portfolio becomes your “fun money” — allowing you to travel, be generous, and live your retirement your way.
The Wealth Hacker’s Takeaway: The Fear Is Real — But So Is the Solution
I see the relief on my clients’ faces when they finally understand how annuities work.
It’s not about buying a product. It’s about solving a problem — removing uncertainty and bringing peace of mind.
We cannot rely on old retirement formulas like pensions, Social Security, and savings.
However, that doesn’t mean your future has to be like that.
With a guaranteed income floor, you can regain control over your finances. By spending confidently, living fully, and not letting fear dictate your choices, you can live a life of meaning and purpose.
Annuities aren’t for everyone. For many, though, it’s the missing piece to a stable, predictable retirement.
The Wealth Hacker’s move here is simple: Secure your foundation, so you can play smarter with the rest.
FAQs
Are annuities better than CDs or bonds in 2025?
Often, yes. With higher interest rates, Multi-Year Guaranteed Annuities (MYGAs) can beat CDs and Treasury bonds, and your gains grow tax-free. Plus, they can be converted into lifetime income — something no bank can do.
When does an annuity make sense?
An annuity is ideal if you’re near retirement (or already there) and want to:
- Secure a guaranteed income floor for essentials.
- Protect your savings from market volatility.
But, you may be better served by other investments if you’re still in growth mode with decades ahead.
Aren’t annuities full of fees and fine print?
That depends on the type.
- Fixed and MYGA annuities usually have no annual fees and are straightforward.
- Fixed Indexed Annuities (FIAs) may charge 1–1.5% annually for lifetime income riders.
- Variable annuities are expensive (2.5–3% in fees) and are best used for specific tax strategies.
In any investment decision, transparency and a fiduciary advisor are essential.
Can annuities keep up with inflation?
Some can.
- Inflation-adjusted riders increase payouts annually — usually by 2–3%.
- FIAs provide built-in inflation protection while allowing you to benefit from market gains.
Image Credit: Kampus Production; Pexels
