Annuity payouts are the highest they’ve been in years. Thanks, inflation.

Rising interest rates — driven by inflation fears tied to the Iran war and U.S. fiscal deficits — have materially raised annuity payout rates, creating a tailwind for retirees seeking guaranteed lifetime income. Six months ago a 65-year-old with $100,000 could lock in about $593/month (7.1%); today the same prime could fetch $632/month (7.6%), and a 70-year-old man can get roughly 9.3%. The benchmark 10-year U.S. Treasury yield is around 4.57–4.58%, and higher yields on Treasurys and corporate bonds tend to push annuity rates up. Sales of single-premium immediate annuities rose 22% in Q1 but remain small ($3.7 billion). If interest rates continue rising, the article expects annuity demand and payout rates to increase further, benefiting retirees while reflecting mixed effects across the broader economy.