How do I get out of a tax deferred annuity so that I can use the money in a less foolish manner now that I have found the fools? It is the only excess cash I have. THANKS
Greetings, Bbarry, and welcome. You asked: <<How do I get out of a tax deferred annuity so that I can use the money in a less foolish manner now that I have found the fools? >>If this is a tax sheltered annuity purchased with after-tax dollars, simply surrender the contract to the issuer. You may have to pay surrender fees when you do. After those fees are asssessed, any amount of the net proceeds that exceed your original cost must be declared as income for the year and it will be taxed. Additionally, if you're younger than age 59 1/2, you will be assessed a 10% early withdrawal penalty on that gain.Regards...Pixy
Another option is to contact the annuity holder and see if you can do a rollover to a self directed IRA. Set your SDIRA up with someone and then have them fill out the papers for the annuity transfer. It is important that the check not come to you, but go directly to the agent holding your SDIRA. You might still have to pay a surrender fee, but you will avoid the 10% penalty and will not lose the tax defered status. If you annuity holder is like most, this will be a difficult process, but you shold be able to accomplish it through persitence and perserverance. I am working on this for my wife's annuity from a 401K. Good luck,G Wayne
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