Over the past year, we've witnessed a remarkable surge in annuity investments, totaling an impressive $385 billion. This substantial increase, surpassing the previous $313 billion set in 2022, can be primarily attributed to the rise in interest rates and the heightened level of market uncertainty.

The attention on annuities is well-deserved. In retirement planning, they offer a valuable shield against the depletion of savings and provide a dependable income stream akin to a pension or Social Security. Additionally, gains on these investments are tax-deferred until distributed.

Given the current interest rate bull market, investors are looking to lock in the high-interest rates and performance guarantees, making specific annuity options attractive for securing steady returns and lifetime income. It's essential, however, to recognize that not all annuities are created equal. Let's explore four options:

1. Fixed-rate deferred annuities: These annuities lock in a fixed return over a predetermined number of years and have gained significant popularity due to current attractive interest rates and safety*.
2. Single premium immediate annuities (SPIA): With a SPIA, the insurer initiates regular fixed monthly payments upon your investment, promising financial stability for your lifetime.
3. Registered index-linked annuities (RILA): This investment allows you a safer way to participate in the market via market index strategies, but with buffers in place to protect against some or all losses. It offers a unique opportunity to participate in market gains while providing a safety net during market downturns.
4. Variable annuities: Variable annuities offer the potential for higher returns by allowing you to invest in a variety of underlying investment options. Income riders can be added for a fee to ensure lifetime income regardless of market performance.

Many well-informed investors are including annuities to enhance their portfolios. Now may be an excellent time to review your investment strategy and consider whether an annuity or another financial approach can complement your long-term goals.

Note that annuities more than five years old should be audited to confirm whether a product based on current features and market conditions would be better.

* Annuities are issued by insurance companies. The safety of an annuity is based on the financial strength of the insurer. Insurance Products are not insured by the FDIC or any other federal government agency, or by any bank or bank affiliate; and may be subject to investment risk, including possible loss of value.