golfbagg, you asked:<< 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? >>The only way to avoid a taxable distribution of this annuity and still keep the annuity in her control would be to do a 1035 exchange into another annuity. From the sound of it, I doubt that your mother would be comfortable with a Variable Annuity and has particular interest in guarantees. Perhaps you might sit down with your mother AND this agent to discuss Equity Index Annuities that provide "guarantees" that your mother is probably most interested in AND can offer the opportunity to earn more than what the fixed annuity is offering . . . . .???There may be other options as how to handle this annuity . . . . but a LOT depends on the specific details of your mothers financial situation along with here goals and objectives for retirement and estate transfer.
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