# Annuity Contracts Need Review

> Older annuities may earn lower rates than current options, but replacing them risks losing valuable benefits.
- Title: Annuity Contracts Need Review · Kiplinger | Shortify
- Summary: Older annuities may earn lower rates than current options, but replacing them risks losing valuable benefits. Review annuities when surrender periods end or…
- Keywords: annuity, fixed annuity, surrender period, income annuity, renewal rate, 1035 exchange, retirement planning, annuity review, fixed rate deferred annuity, income rider, death benefit, tax-deferred growth
- Source: Kiplinger — https://kiplinger.com/retirement/annuities/is-your-annuity-still-competitive
- Published: 2026-09-27T10:00:00+00:00
- Read time: 1 min
- Topics: annuity, fixed annuity, surrender period, income annuity, renewal rate, 1035 exchange, retirement planning, annuity review, fixed rate deferred annuity, income rider, death benefit, tax-deferred growth
## Annuities Often Stay Untouched
Investors regularly check stocks and bonds but rarely review annuities, which can sit untouched for years.
## Interest Rates Changed Everything
Rising interest rates from 2020s low levels reshaped annuity economics, with U.S. retail sales hitting $464.1 billion in 2025.
## Old Fixed Annuities Are Risky
An older fixed annuity with a low renewal rate could earn 2% versus new annuities offering 4% or 5%, costing $5,000 annually on a $250,000 contract.
## Original Purpose Matters Most
If you bought an annuity for guaranteed income, focus on income potential, not current value.
## 1035 Exchange Rules Apply
Section 1035 of the Internal Revenue Code allows swapping annuities without tax recognition, but new contracts may restart surrender periods.
## Don't Replace Without Care
Older contracts might have accumulated benefits like lifetime income riders that can't be duplicated with new products.
## Review When Surrender Period Ends
Check annuity rates and guarantees when surrender periods expire to avoid costly rate differences.
## Compare Full Economic Value
Evaluate the entire economic value of an existing contract versus alternatives, not just current rates.
## Annuities Need Periodic Checks
Like stocks and bonds, annuities should be reviewed periodically as market conditions and retirement needs change.
## Surrender Charges Matter
After surrender periods expire, annuities may have low renewal rates but no surrender charges, making them less competitive.
## Income Riders Are Valuable
Lifetime income riders can provide substantial benefits that may not be replicable with new annuities.
## Tax Implications Exist
Section 1035 exchanges avoid tax recognition but require careful comparison of surrender charges and benefits.
## Key takeaway

Review annuities when surrender periods end or interest rates change to ensure they still meet your retirement goals.