Private credit score changing into ‘massive piece’ of annuities, T. Rowe exec says
From left: Chris Ceder, a senior retirement strategist at Goldman Sachs and Wyatt Lee, head of goal date methods at T. Rowe Price
Goldman Sachs retirement survey finds 83% need assured revenue, whereas the annuities offering that revenue more and more maintain non-public credit score.
Retirees counting on annuities for assured revenue might more and more discover their annuity merchandise tied to underlying investments in non-public credit score.
According to the brand new 2026 Goldman Sachs Asset Management Retirement Survey & Insights Report, 83% mentioned they wished some assured revenue as a part of their retirement revenue technique. Goldman Sachs executives mentioned the survey findings on Monday in a media panel that included Wyatt Lee, head of goal date methods within the international multi-asset division at T. Rowe Price.
“Private credit score is changing into an enormous piece of the underlying holdings within the annuity house, and that is most likely a superb factor as a result of non-public credit score has, over time, taken on a big a part of what conventional public capital trading floors had lined earlier than,” mentioned Lee. “To construct a broadly diversified portfolio that gives the revenue that you just want, non-public credit score is a key a part of that SAA [strategic asset allocation] course of.”
Lee co-manages goal date portfolios at T .Rowe Price, which says about two-thirds of its $1.9 trillion in belongings beneath administration is tied to retirement.
Private credit score stress
Life insurance coverage firms usually promote annuities in change for financial savings from folks wanting a gentle stream of assured funds in retirement. Researchers from the Chicago Fed discovered that life insurer investments in private credit reached $849 billion in 2024, which was greater than double what it was in 2014, according to Axios.
Heightened publicity of annuities to non-public credit score comes as Fitch Ratings reported in mid-September that the trailing 12-month default charge for U.S. non-public credit score debtors hit a record 6.3% in August, up from 6.1% in July. The stress has hit retail investors, comparable to these invested in semi-liquid private credit funds like Blackstone Private Credit Fund (BCRED), which capped quarterly redemptions at 5% amid a surge in buyers looking for to withdraw.
The Goldman Sachs survey polled 5,106 Americans in July 2026, consisting of three,612 working people throughout generations and 1,494 retirees ages 45–75. Workers could possibly be proof against locking financial savings into annuities at the same time as they need the assured revenue these merchandise present, mentioned Chris Ceder, a senior retirement strategist at Goldman Sachs Asset Management.
“We do see the goal date (retirement) funds who’ve the annuities. I feel one of many challenges is definitely getting folks to grasp the annuity choice,” mentioned Ceder. “By and enormous, folks don’t wish to tie up cash in an annuity, however in addition they need all of the traits that it supplies in lots of circumstances.”
Human over AI recommendation
Goldman Sachs requested respondents whether or not they would need human or AI steering with regards to assured revenue and annuities, with 61% saying they like a human, whereas 20% selected AI and 19% mentioned both. Total U.S. annuity gross sales rose 2% year over year to $121.2 billion within the second quarter of 2026, in line with information from LIMRA.
“We’re seeing rising demand for annuities throughout the board,” mentioned Lee. “From a monetary advisor perspective, they’re ideally positioned to have the ability to speak about them as a result of many people are reluctant to annuitize on their very own. “So having a trusted associate who you possibly can work with to take that step and determine the appropriate sort of annuity relative to what your wants are, turns into actually critically necessary.”
