Private credit becoming 'big piece' of annuities, T. Rowe exec says

Retirees relying on annuities for guaranteed income could increasingly find their annuity products tied to underlying investments in private credit. 

According to the new 2026 Goldman Sachs Asset Management Retirement Survey & Insights Report, 83% said they wanted some guaranteed income as part of their retirement income strategy. Goldman Sachs executives discussed the survey findings on Monday in a media panel that included Wyatt Lee, head of target date strategies in the global multi-asset division at T. Rowe Price.  

“Private credit is becoming a big piece of the underlying holdings in the annuity space, and that's probably a good thing because private credit has, over the years, taken on a significant part of what traditional public capital markets had covered before,” said Lee. “To build a broadly diversified portfolio that provides the income that you need, private credit is a key part of that SAA [strategic asset allocation] process.” 

Lee co-manages target date portfolios at T .Rowe Price, which says about two-thirds of its $1.9 trillion in assets under management is tied to retirement. 

Private credit stress

Life insurance companies often sell annuities in exchange for savings from people wanting a steady stream of guaranteed payments in retirement. Researchers from the Chicago Fed found that life insurer investments in private credit reached $849 billion in 2024, which was more than double what it was in 2014, according to Axios. 

Heightened exposure of annuities to private credit comes as Fitch Ratings reported in mid-September that the trailing 12-month default rate for U.S. private credit borrowers hit a record 6.3% in August, up from 6.1% in July. The stress has hit retail investors, such as those invested in semi-liquid private credit funds like Blackstone Private Credit Fund (BCRED), which capped quarterly redemptions at 5% amid a surge in investors seeking to withdraw.

The Goldman Sachs survey polled 5,106 Americans in July 2026, consisting of 3,612 working individuals across generations and 1,494 retirees ages 45–75. Workers could be resistant to locking savings into annuities even as they want the guaranteed income those products provide, said Chris Ceder, a senior retirement strategist at Goldman Sachs Asset Management.

“We do see the target date (retirement) funds who have the annuities. I think one of the challenges is actually getting people to understand the annuity selection,” said Ceder. “By and large, people do not want to tie up money in an annuity, but they also want all the characteristics that it provides in many cases.” 

Human over AI advice 

Goldman Sachs asked respondents whether they would want human or AI guidance when it comes to guaranteed income and annuities, with 61% saying they prefer a human, while 20% chose AI and 19% said either. Total U.S. annuity sales rose 2% year over year to $121.2 billion in the second quarter of 2026, according to data from LIMRA. 

“We're seeing increasing demand for annuities across the board,” said Lee. “From a financial advisor perspective, they're ideally placed to be able to talk about them because many individuals are reluctant to annuitize on their own. “So having a trusted partner who you can work with to take that step and figure out the right type of annuity relative to what your needs are, becomes really critically important.”