The Federal Reserve promised to reduce interest rates once it’s sure inflation has cooled sufficiently. For retirees who hold or are considering buying interest-sensitive fixed annuities, a rate cut could have significant implications.

So what should they do to prepare for rate cuts?

Micah Schmidt of Prime Capital Investment Advisors in Overland Park, Kan., puts it this way: “Nobody should purchase a fixed annuity based solely on the expectation of declining rates,” he says.