Golfbagg asks:My mother (late 70s) has an annuity that is only getting 5% interest and is past its surrender period. Her insurance man is trying to get her to do a 1035 into another annuity at 6.25%, but it comes with a 6 year surrender schedule.If she doesn't want any immediate tax consequence, is this the only way she can go? As all of the money in this account is pretty much earning, is there anywhere else she can go with it and still stay tax deferred? No, there is no other way to move the money elsewhere and maintain the tax-deferred status on the gains. She either uses another annuity to improve her return by buying it through a 1035 exchange, or she surrenders the annuity and pays ordinary income tax on the gain to invest elsewhere in a taxable account. Regards..Pixy
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