Managing Your Annuity

Longer held assets like annuities can easily shift to lower-than-market interest in the constantly changing economic environment. As consumers we can often miss the nuances in concepts like interest, but there is a huge difference between interest earned with insurance company annuities and interest earned at banks.

Managing your AnnuityBanks use the Federal Reserve Discount Rate as a reference point for interest, which is volatile in the sense it will raise and lower generally several times during the course of a year. As these rates change so will bank interest rates and mortgage rates for home financing.

Insurance companies use the 10 Year US Treasury yield when setting their crediting rate. The Treasury rate is always based on long term yield and is not affected by the Federal Reserve Discount Rate.

Bill Broich 2016 Annuity And Investment Report
Bill Broich of has come out with his 2016 Annuity And Investment Report. You can download his paper by clicking on the cover image or clicking this download link to get an inside perspective on 2016 annuity options and how they compare with other retirement strategies.

Take an active management role with your annuity so you can earn the highest level of interest possible.

As consumers, we want the highest rate we can earn. When interest rates increase, it is natural to compare your current annuity earnings with the other available options, and want to make a change. Because even older annuities may still have a surrender penalty in place, it can be confusing to figurre out how to move your money to a higher rate of interest and not lose any of your account to surrender fees.

  • Call your current company and tell them you are not happy and you want a higher interest rate. They have several products in “reserve” for this situation and will do everything possible to keep your money invested with them. Explore the options but do not make a decision until you have looked at all your options.
  • Call your agent and tell them you want a new policy. Independent agents can provide you with offers from a wide variety of Insurance providers and may be able to negotiate a “front end bonus” where the cost of moving your money will cover any remaining surrender penalty.
  • To move an annuity and to keep your tax liability intact, be sure and use an IRS 1035 exchange. The company you are working with will provide you with the correct form.

    This material was prepared by Retire Village in Partnership with Bill Broich of, and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.