DonkeyJote, you asked:<< My basic question is, would I do better to move all the money from my annuity to my IRA account through a lump-sum withdrawal rather than annuitize that money? >>You cannot move/roll-over an annuity that is outside of an IRA into an IRA. So, forget that idea.<< Or, since I've already eaten the costs of management fees and insurance product fees for years by purchasing the annuity in the first place, is there some kind of advantage I can get out of it by annuitizing it and starting distributions? >>You'd be better off annuitizing the annuity. This is because that during the period of distributions any growth is greater within the annuity due to the tax deferral. Depending on how certain you are about your life expectancy, you may only want to select a 10 year payment period where at the end of 10 years the balance goes to zero . . . ??? If you have the risk tolerance and want to have some control over what types of investments are in the annuity, you might want to consider is doing the 1035 exchange into a Single Premium Immediate Variable Annuity so that the income has the opportunity to grow per your investment selection(s).<< In other words, is an annuity always something to run away from as soon as one realizes it's a bad investment, or should those of us who got stuck with one years ago now go ahead and utilize the distribution phase of the annuity rather than taking a lump-sum withdrawal? >>If you don't like your annuities returns, you can always do a 1035 exchange into an annuity that does have investment choices that can give you investment returns as you might expect from any mutual fund. The difference being that an annuity has slightly higher expenses on the average. Some variable annuities, especially in very recent days, have quite low expenses. So the answer is . . .NO, they're NOT something you have to "run away" from . . .especially in a case like yours.
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