Interest rates are low, and are continuing to fall fast. Those who are actively saving for retirement have seen their savings accumulations slow down considerably. If you have purchased a fixed annuity, you might be unhappy with its current interest earnings rate. However, you may feel stuck because of high surrender charges, because the annuity’s term is not complete. Why not consider a partial exchange of annuity funds, a program authorized by the IRS in 2000. This is a way for individuals to move a percentage of an annuity into another product with higher annuity rates without triggering a taxable event.

Many deferred annuities allow withdrawal of up to 10% of the annuity’s value annually, without applying surrender charges. If you hold an annuity whose rates have decreased considerably, consider taking advantage of better interest rates by directing this yearly 10% withdrawal from the original annuity into an annuity with better interest rates. You can take out 10% from the old annuity yearly until the surrender term has passed. A partial 1035 exchange (the official IRS terminology) helps you move funds between annuities, without the funds being earmarked for federal income taxes at the end of the year.

Why should you move funds from one annuity to another, especially if there is what seems to be a small difference between interest rates? For one, even a small increase in an annuity’s interest rate could add up over time, due to an annuity’s tax deferred status. In other savings vehicles, such as savings and money market accounts, yearly income taxes on interest earnings can bite into overall gains. Secondly, some deferred annuities offer upfront bonuses. This small bonus percentage gives your initial investment a sizeable bump. These aspects make a partial exchange from an underperforming annuity to an annuity with a better rate a wise move.

A partial exchange could be just what your ailing annuity needs. To learn more about the partial exchange process and to get up-to-the-minute annuity rates from over 40 insurance companies, call the Annuity Specialists from AnnuityForLife.com at 1-888-261-6237, or check out the latest annuity rates online at http://www.annuityforelife.com.