Annuities save Social Security $100B, ACLI research reveals
March 12, 2025 by ACLI
WASHINGTON – New research from the American Council of Life Insurers finds that benefits from annuities enable retirees to postpone receiving Social Security payments, saving the program $100 billion over time as the greatest surge of baby boomers retire.
By delaying Social Security payments until age 70, retirees can increase their benefit payments with each year of delay. As a result, the net lifetime payouts from Social Security are less than for retirees who begin receiving payments at age 67. By providing a stable base of retirement income, annuities enable retirees to delay receiving Social Security benefits.
“Life insurers are putting life into America, and this research is further evidence of that,” said ACLI President and CEO David Chavern. “Along with the financial and retirement security we provide consumers, life insurers are supporting the long-term financial strength of an important public program.”
The research found multiple ways that life insurer products significantly reduce the federal government’s public safety net financial burdens:
- The lifetime income from annuities saves Social Security $100 billion over time.
- Private disability income insurance benefits save the Social Security Disability Insurance program $8 billion over 10 years.
- Private long-term care insurance saves Medicaid $14 billion over 10 years by preventing individuals from spending down their personal assets to qualify for the program.
The research, released today during an event hosted by Semafor, adds an important perspective to discussions around spending and tax policy currently underway in Congress.
“As lawmakers work to extend the pro-growth Tax Cuts and Jobs Act, they should carefully consider which industries are providing the greatest good to the nation,” Chavern said. “As our new research makes clear, the financial support life insurers provide America’s families extends to the nation’s finances and its vitally important public safety net.”
Read a one-page summary of the research here and access the full report here.
