How tariffs could impact annuities and your retirement income

As tariff policies and market developments change, investors must cut through the noise and establish an investment strategy that brings clarity to their financial future. The ripple effects of the Trump tariffs have already fueled periods of market volatility. While unsettling, this is nothing new — the stock market always moves up and down. It’s the volatility in other markets, particularly with bonds and interest rates, that annuity holders need to pay attention to.

Gainbridge maintains the same focus regardless of what’s happening in financial markets and the broad economy. We believe that fixed annuities offer a stable, secure long-term growth option in times of economic uncertainty.

In this article, we’ll explain what tariffs are and discuss how they may affect both the broader financial landscape and annuities specifically.

Why do tariffs matter to retirees?

Tariffs are taxes that governments place on imported goods and services. By raising the cost of imports, tariffs can also push up prices for domestically produced goods that depend on imported materials or components. In this way, tariffs often drive overall prices higher and can 

contribute to inflation.

For retirees, particularly those who budget on fixed incomes, inflation erodes the purchasing power of the dollar. Income sources like Social Security, pensions, and retirement savings don’t go as far. Even if you’re not invested in the stock market, tariffs impact the greater economy, which can affect the value of your money. 

Tariffs can indirectly impact retirement funds. If you’re approaching or already in retirement, you typically need a plan you can trust and stick with through market swings and economic cycles.

How tariffs influence annuity rates and performance

Beyond stocks, the link between tariffs and products like annuities is more indirect, but still can be meaningful.

Look at it like this: Tariffs raise the cost of imports, which can fuel inflation. In response, the Federal Reserve may raise interest rates to keep inflation in check — though if tariffs slow economic growth, the Fed could move to lower rates instead. These shifts in interest rates influence bond yields, which can play a role in determining annuity rates. This is a large-scale hypothetical example that happens over an extended period of time. 

Insurers (the life insurance companies that issue and guarantee annuities) typically invest in fixed-income products to back annuity contracts among other assets. Changes in interest rates and shifts in the bond market can affect rates on new annuities. 

In a tariff-driven environment, retirees can face volatility and uncertainty in interest rates and bond markets. This makes it imperative to understand how different types of annuities perform under these conditions. Knowing how each option might respond to economic changes such as interest rate adjustments and tariffs can help you act accordingly and with peace of mind.

How different annuity types respond to economic volatility

Each type of annuity responds differently to economic stress. Here’s a look at how the major products vary.

Fixed annuities

If tariffs have you worried about market swings, fixed annuities remain one of the  relatively stable options for steady, guaranteed interest rates.

Fixed annuities are relatively safe long-term products because they offer guaranteed interest rates over a fixed period. No matter what happens in financial markets or the economy, you’ll receive the rate you originally signed up for. Retirement investors often find that fixed annuities provide peace of mind as volatility ebbs and flows. Keep in mind fixed annuity interest rates may change often based on economic conditions, but once you commit to a product, the rate at issue is typically locked in for the duration of your contract.

Fixed indexed annuities

Fixed indexed annuities (FIA) offer a mix of security and growth. An FIA protects your principal contribution from market losses but ties growth to the performance of a major index, such as the S&P 500. You get downside protection, but tariff-related volatility could impact your interest growth.

Variable annuities

Variable annuities directly expose you to stock market volatility. Your rate of return is directly connected to how well the underlying investments — held in subaccounts similar to mutual funds — perform. So, there’s no guarantee, and as with other equity investments, you can lose money in a variable annuity.

Multi-Year Guaranteed Annuities

Multi-year guaranteed annuities (MYGAs) typically offer a fixed interest rate for periods ranging from 3 to 10 years. Like fixed annuities, you know how much you’ll make on your money and for how long. In a tariff-driven environment, MYGAs can provide another relatively safe way to create clarity within your retirement plan.

Preparing your portfolio for economic instability

Tariffs, trade wars, inflation — heading into 2026, they can feel as certain as death and taxes. They also remind retirement investors that a well-considered, diversified strategy can help weather short-term storms. 

Here are some suggestions to help you confidently navigate the prevailing economic uncertainty.

Lock in fixed rates when they’re high, if appropriate 

If inflation rises and the Federal Reserve reverses course and increases interest rates due to tariffs, it can make sense to lock in a fixed annuity or MYGA while rates are high. As interest rates rise, insurers tend to increase guaranteed rates on annuities at or around the same time. ‘High rates’ is a relative term and can vary from person to person. As no one knows exactly where interest rates may go, consider what is suitable for your situation. 

Diversify across annuity types for income and upside

No matter the economic or market sentiment, diversification remains a common cornerstone of any investment strategy. A blend of annuity types can help balance stability and opportunity for retirees. Fixed annuities and MYGAs can cover essential living expenses, while variable annuities offer the chance to participate in market growth.

Speak with a licensed advisor about retirement income strategies 

Timing the market is generally not a good idea. Instead, a financial advisor can help you diversify with investment strategies that balance growth and income for your stage of life.

Why Gainbridge annuities are built for uncertain markets

Tariffs can create economic uncertainty, stock market volatility, and affect bond markets. Combined with trade wars, tariffs can contribute to inflation. All of the above can impact investors looking to solidify a retirement plan focused on income. Ultimately, it’s typically wise to stay diversified and, for certainty during uncertain times, consider fixed annuities and MYGAs. 

Gainbridge’s fixed annuities can be smart, stable options for volatile economies. They offer fixed interest rates with no hidden fees or commissions. You can manage Gainbridge’s digital-first annuities entirely online, and enjoy guaranteed growth and income for lasting peace of mind.

Explore Gainbridge to find the annuity that can bring clarity and confidence in an economy unsettled by tariffs.

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This article is for informational purposes only. It is not intended to provide, and should not be interpreted as, individualized investment, legal, or tax advice. For advice concerning your own situation please contact the appropriate professional. The Gainbridge® digital platform provides informational and educational resources intended only for self-directed purposes. Guarantees are backed by the financial strength and claims-paying ability of the issuer.

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