Mary from Texas has a $200,000 fixed 3-year annuity approaching maturity. She does not need the cash and does not want to invest in stocks or roll into an IRA. When she brought this question to financial advisor Wes Moss on the Clark Howard Podcast’s “04.07.26 Ask An Advisor With Wes Moss” episode, his answer started with a clarification that most annuity holders never think to ask: where exactly does this money live?
The Crockpot Principle: Why the Tax Question Comes First
Moss determined that Mary’s annuity sits inside an IRA, and that single fact changes everything about her options. His analogy made it concrete: “IRAs are like crockpots. Everything’s staying in. You can change the investments, the ingredients can mix, and it’s still fine.”
When an annuity is held inside a qualified account like a rollover IRA, moving the proceeds from a maturing annuity into a different investment does not trigger a taxable event. The money stays inside the tax-deferred wrapper. You are changing what the money does, not where it lives for tax purposes. No lid comes off the crockpot.
The situation differs for annuities held outside a retirement account. There, the earnings portion of a maturing annuity is taxable as ordinary income in the year you receive it, unless you roll into another annuity within 60 days under a 1035 exchange. Mary’s case avoids that problem entirely. If you are in a similar position, confirming whether your annuity is inside or outside a qualified account is the first question to answer.
The Recommendation: Treasury Money Markets and Why They Fit
With the tax picture settled, Moss turned to Mary’s actual concern: safety. “I do not need the cash at this time and do not wish to invest it in my rollover IRA and/or in the stock market.” She wanted somewhere stable to park $200,000 while keeping it accessible and protected.
Moss’s answer was direct: “I like the Treasury money markets that are just 100% short-term US Treasury.” These funds hold only short-duration US government obligations, carry no credit risk, and maintain a stable $1.00 net asset value. They differ from standard bank money market accounts, which may hold commercial paper or other instruments. The Treasury-only version is about as close to risk-free as liquid investing gets.
The yield picture supports the choice right now. Moss cited a current yield range of 3.5% to 4% for these funds. The Federal Reserve’s target rate currently sits at 3.75%, and the 10-year Treasury yield is about 4%. Treasury money market yields track the short end of that curve, moving with Fed decisions. On $200,000, a 3.5% to 4% yield produces meaningful annual income for someone who does not need the principal. At , that works out to roughly $7,000 annually in income. At , that figure rises to $8,000. For someone who does not need the principal, that is meaningful income from an instrument with essentially no market risk.
Where This Advice Works and Where It Needs Adjustment
The crockpot framework applies cleanly when the annuity is inside a qualified account and the holder has no immediate income need from the proceeds. For Mary, both conditions are met. The Treasury money market suggestion is also well-matched to her stated goals: capital preservation, no equity exposure, and liquidity.
The advice fits less well in two scenarios. First, if the annuity sits outside a retirement account, the tax consequence of doing nothing could be substantial, and a 1035 exchange into a new annuity deserves serious consideration before maturity. Second, for someone with a longer time horizon who does not need the money for a decade or more, parking $200,000 in a money market fund that yields below the current core PCE inflation trend carries its own quiet risk: purchasing power erosion over time. The Core PCE index has risen steadily from about 126 in April 2025 to about 129 by February 2026, a reminder that “safe” and “inflation-protected” are not the same thing.
What to Do Before Your Annuity Matures
- Confirm the account type. Check whether your annuity is held inside a traditional IRA, rollover IRA, or non-qualified account. This determines whether a move triggers taxes. Your annuity contract or custodian will have this information.
- Know your maturity date and surrender window. Fixed annuities typically offer a short window after maturity to move funds without penalty. Missing it can trigger automatic renewal at a new rate you did not choose.
- Compare Treasury money market yields against your renewal rate. If the insurer offers to renew at a rate below what a Treasury money market fund currently yields, the choice is straightforward for a safety-first investor.
- Consider your inflation exposure honestly. A Treasury money market fund is the right answer for capital preservation over a short horizon. For a 10-plus year horizon, a conservative income allocation with some inflation sensitivity deserves consideration.
Moss’s crockpot analogy reframes the question correctly: the issue is not whether to “do something” with a maturing annuity inside an IRA, but which ingredient to swap in next, without ever lifting the lid.
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