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Greetings, smr6021, and welcome. You asked:

<<Can I close the TDA annuity account that I've had with VALIC for many years and place it into an index investment something like Vanguard 500 with out incurring any kind of a tax problem, I'm new at this stuff, thanks. >>

You will have to be more specific as to what you actually have, a Tax Sheltered Annuity (one purchased within an IRA or retirement plan like a 403b) or a Tax Deferred Annuity, a plain ole vanilla product bought with after-tax dollars that is not part of an IRA or qualified retirement plan. If you bought a TSA, then it might be possible to surrender that beast and move to a different vehicle without incurring income taxes or penalties for an early withdrawal. If you bought a TDA, then the answer would be no. All you can do in a TDA is a tax- and penalty-free 1035 exchange for another annuity that might let you invest in better mutual fund look-alikes. Otherwise, on surrender you will pay taxes and penalties on any gain in the annuity.

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