Since the introduction of variable or indexed annuities, which insurance companies introduced to compete with the growing popularity of mutual funds, annuity sales have risen steadily every year.  However, annuity sales have skyrocketed over the past year as a tidal wave of baby boomers are about to hit retirement age.

With life expectancies on the rise, there is a growing fear for many Americans that they will outlive the assets which they have accumulated over a lifetime.  There is also a lack of confidence in the Social Security system and it’s ability to remain solvent for more than another couple of decades, which is why they have grown popular even with the younger generations.  The decline in the stock market since the end of last summer has also played a major role in it’s rapid growth.

It is important to choose carefully which insurance company to purchase an annuity from.  As the current economic downturn has proven, even the insurance industry isn’t immune to losses.  Due to the open ended liabilities these type of financial products incur for insurance companies, financial strength should be a primary concern.

Different retirement strategies may offer the possibility of higher rates of return as well as similar tax benefits but none of them offer the type of guarantees which you can only find with annuities.  No other type of investment offers the ability to receive guaranteed income streams for the rest of your life.