When it comes to annuities, there are many things that people don’t know. One of the most common questions we get is, “what is sweeping the interest?” Let’s take a closer look at what this means and how it works.
What Does Sweeping The Interest Mean?
Not to be confused with an interest sweep with variable annuities, sweeping the interest with annuities simply means that the annuity owner withdraws the interest accumulated on their annuity account and uses it to supplement their retirement income. This retirement income strategy is a popular option for retirees because it allows them to receive a regular payment without reducing the value of their annuity.
After the fixed annuity’s term is matured, the retiree moves the investment into another fixed annuity product, like a Certificate of Deposit at a bank.
How Does Sweeping The Interest Work?
When you sweep the interest, your annuity company will send you a check for the amount of interest accumulated on your account. You can then use this money to supplement your retirement income or for other purposes.
Sweeping the interest is a great way to receive a regular income from your annuity while preserving the original investment.
Please contact us if you have any questions about annuities or sweeping the interest. We would be happy to help you understand how this works and if it is right for you.
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