US Longevity Economy Growth Spurs Innovation in Annuities and Geroscience
The global demographic landscape is undergoing a significant shift as the population aged 65 and over is expected to exceed 1.6 billion by 2025, accompanied by a decade-long increase in life expectancy since 1980. This aging trend presents substantial economic opportunities, particularly impacting retirement planning, healthcare, and financial services. Aging populations are driving demand for innovative financial instruments like annuities and AI-enabled solutions that manage longevity risk.
In developed economies, the median age is projected to rise from 30 to 47 by 2075, while declining fertility rates exacerbate the demographic imbalance. In the U.S., the population aged 65 and above is anticipated to reach 23% by 2050, challenging pension systems and labor markets. The working-age to retiree ratio has already decreased significantly, intensifying the need for annuities and longevity management tools.
Geroscience, the study of aging as a fundamental cause of disease, is attracting over $2 billion in investments annually. In 2025, the sector raised $2 billion through numerous deals, with companies focusing on therapies to delay cognitive decline, a market projected to grow to $200 billion by 2030. Investment emphasis is on startups with clear clinical and regulatory pathways, reflecting growing institutional confidence in longevity science advancements.
The U.S. annuities market has reached new heights, with 2025 sales hitting $430 billion. Products such as Registered Index-Linked Annuities (RILAs) and Fixed Indexed Annuities (FIAs) see strong growth, while Fixed Rate Deferred annuities encounter pressure due to declining interest rates. However, demand for Single Premium Immediate Annuities (SPIAs) remains strong, reflecting pre-retiree concerns over guaranteed income. Major providers like Prudential Financial and MetLife are adapting their offerings to evolving consumer needs.
Artificial intelligence is transforming retirement planning by personalizing longevity strategies and optimizing annuity portfolios. AI-driven platforms are forecasted to reduce healthcare costs significantly through early diagnosis and remote monitoring, while financial firms use AI to develop tailored insurance products and age-friendly investment solutions. Older adults control considerable wealth, with expected substantial intergenerational wealth transfers, further influencing market dynamics.
Despite strong growth potential, challenges such as regulatory uncertainty in geroscience and interest rate volatility for annuities present risks. Nevertheless, the demographic shift toward an aging population supports long-term investment opportunities across healthcare, finance, and technology sectors.
Overall, the aging demographic is reshaping multiple industries by driving innovation in financial products and healthcare, creating a longevity economy that is both an economic opportunity and a catalyst for new market developments. Investors engaging with this sector can expect compounded rewards aligned with extended lifespans and evolving market demands.