Why Now Might Be the Best Time to Refinance Your Annuities

Why Now Might Be the Best Time to Refinance Your Annuities

If you're like many South Florida retirees or pre-retirees, you may have locked in some solid rates on your CDs, bonds, or annuities over the past year or two. But there’s a big shift coming and it could change the retirement fixed income payments in a major way.

The market is pricing in that interest rates are likely to be cut 4 times over the next 9 months. That’s great news for borrowers, but not so great if you're relying on fixed income assets to generate reliable returns.

So what does that mean for you? If you own any fixed-rate assets like CDs, annuities, or bonds, and especially if they’re maturing in the next 3–5 years, you might want to take a closer look at your options now, while interest rates are still attractive.

Falling Interest Rates = Lower Future Returns

Let’s break this down. When interest rates fall, banks and insurance companies start offering lower rates on new deposits. Whether that’s in money market accounts, CDs, or annuities. That means the same dollar amount tomorrow might earn you less than it does today.

The good news is: your current fixed-rate products aren’t affected immediately. If you have a CD or annuity earning 4% right now, that interest rate is locked in for the remainder of its term.

But here’s the problem. When that term ends, and it’s time to renew or reinvest, you might find the new rates to be far lower.

Why Timing Matters: The 3–5 Year Maturity Window

If you have any fixed-income products that are set to mature in the next 3 to 5 years, it’s time to pull out your statements and check those dates. These are the accounts most at risk of missing out on today’s higher rates when they renew.

You don’t have to wait until they mature to do something about it. In many cases, you can refinance your annuity or reallocate fixed assets now before rates drop to lock in longer-term guarantees.

Example: Rolling a CD Into a Higher-Paying Annuity

Let’s say you have a CD paying 4% for 4 years. That’s not bad. But what if you're retiring soon or already retired and want to extend that kind of return for a longer period?

That’s where a Multi-Year Guaranteed Annuity (MYGA) can be help.

Some MYGAs are currently offering 5% fixed interest for up to 10 years. That means instead of your money earning 4% for just a few more years, it could be earning 5.75% for a full decade, tax deferred.

This strategy helps you maximize the yield on your fixed-income portfolio and adds predictability to your retirement plan, especially during times of economic uncertainty.

Certainty Is a Strategy—Especially in Retirement

When you're working, you can ride out market ups and downs. But in retirement, consistency becomes key. Having a portion of your assets locked into higher-yielding, fixed-rate products gives you peace of mind and planning clarity.

You’ll know exactly how much income is coming in. You’ll know it’s protected from market losses. And you’ll know it won’t suddenly drop because of what the Fed decides to do next quarter.

Should You Refinance or Reposition Now?

Not everyone needs to act, but if you:

• Own CDs, fixed annuities, or bonds maturing in the next few years

• Are nearing or in retirement and want to lock in predictable returns

• Want to avoid reinvesting into lower-rate products later

Then now is the time to explore options. Think of it like refinancing your mortgage before rates spike, except in reverse. You’re locking in higher returns before they fall.

Final Thoughts: Lock It In While You Still Can

We’re heading into a lower-rate environment. If you’re holding short-term fixed assets, waiting too long could mean leaving serious interest returns on the table.

You don’t have to overhaul your entire portfolio, but repositioning just a portion of it into a longer-duration fixed interest assets with a guaranteed rate and term, could significantly enhance your income and reduce future headaches.

Need guidance in this process? Send us a message below or book a time to speak with an advisor.