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Dear Don,

Yours is not an unusual situation. Unfortunately, salespeople don't always consider much beyond their commission. Given the state of the market, it is sad to say you are probably sitting on a loss. In some respects that isn't all bad since you won't have the issue of recognizing taxable ordinary income when you exit the annuity either by surrendering or through a secondary sale to another person. Depending upon the annuity a secondary sale can offer you more than the direct surrender of the annuity.

Putting the money into an IRA is one option, but you should be aware that the amount you can put in an IRA can be limited if it is in a deductible form. A Roth IRA might be an alternative, and generally a better bet than an annuity at your age.
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