Options for getting out of annuities

[marytruth]

What is the name of your state? NH

Help! I own an annuity which I would like to move into a more efficient growth vehicle. The holding company has surrender charges up to the 8th year. I am into my 9th. I understand I cannot withdraw the money before age 59.5 without IRS penalties. I won't need the money until after that age, however, the investment options offered by the insurance company are limited and burdened with fees. By law, do I have any options to move those liquidated assets to an IRA or any other retirement mechanism?

Thank you!

 

[somarco]

You can take the money out lump sum and pay the tax.

You can take the money out in installments, and spread the tax over the remaining payout.

You can use 1031 exchange rules and have the carrier transfer the funds to another annuity with another carrier.

If this is a tax qualified plan (such as a regular IRA, SEP, etc) you can request the carrier transfer the funds to another entity in a trustee to trustee transaction.

 

[anteater]

Just to clarify, with annuities or insurance generally, it's a 1035 exchange.

 

[somarco]

1035 exchange

Yes, my error . . . please excuse.