Annuity offer will benefit bank more than you

DEAR HARRY: I know you generally don't suggest annuities as supplementary retirement investments. However, about 10 years ago, my wife's uncle convinced us otherwise. So far, it appears to be a fair investment. This week we got a notice from our insurance company with two offers. The first offer is to buy our annuity for cash. The second is to give us $10,026 with us agreeing to the elimination of their guaranteed return and adding some new potential investments. We have no idea of which way to turn. Her uncle is advising us to take the $10,000 and the new terms. The branch manager at our bank advised us to stay where we are. Help!

WHAT HARRY SAYS: You are right about my view of annuities. There are few instances where I think they are appropriate. You may or may not be in that category. You have had this annuity for 10 years. In that period, the company never came to you with a modification proposal. Why are they doing so now? For your benefit? When pigs fly. They guaranteed more than it is now profitable for them to provide. The major factor here is the low interest-rate environment we've had for the last few years. Do not sell the annuity. I don't have enough info to evaluate the other offer, but it is almost certain to benefit the company more than you. I don't know why your wife's uncle chose to take some cash and change the terms. I'm with your banker. Stay where you are unless you can be shown conclusively that the payment offer is to your benefit.