You Can Swap Annuities- Tax-free!.

As with any financial product, you want to make sure that you’re always getting the best deals on the market. The same goes for annuities. Thanks to a 1035 exchange you can switch annuity companies while continuing to defer your taxes. Likewise, you can switch from one type of annuity to another.

If in your 40s you were looking for annuities that let you participate in the stock and bond markets, in your 60s you’re far more like to look for principal protection and guarantees. Your financial needs change as you age.

Consider a fixed-rate annuity. These pay a set interest rate for a set term, similar to bank CDs. However, unlike bank CDs, fixed-rate annuities offer tax deferrals. There are also other key differences. While a CD is insured by the FDIC and guaranteed by a bank, your principal is guaranteed by the issuing insurance company and backstopped by a state guaranty fund.