No. of Recommendations: 0
I did, too, a number of years ago. In the cold light of morning, I wish I hadn't, but it isn't the end of the world either. Although the expenses were not grossly high, they were more than I wanted to keep paying. As appears to be your case also, I had no compelling reason to cash out and eat all the penalties. Fortunately, I was able to do a direct annuity-to-annuity transfer without any financial penalty (these transfers have a number associated with them but I forget it). Whether or not you are able to do so at no cost depends on the surrender provisions of your present annuity contract. I found the lowest cost alternatives to be TIAA-CREF and Vanguard. (Vanguard has index funds available within the annuity; TIAA-CREF does not have a true index fund although their overall investment approach is somewhat indexy.) I would echo the advice not to put any new money into the annuity but if you can transfer the existing funds to a low cost annuity that has good fund choices, I see no reason to do anything drastic if you don't need the money now. I don't plan to ever annuitize the annuity; when the time comes I will manage the withdrawals myself. I will also use the funds in the annuity toward the beginning of retirement so as to deplete an account that has a relatively less favorable tax treatment for my heirs in favor of retaining funds longer in accounts that have a relatively more favorable tax treatment. (This goes against the wise advice to let your annuity continue to grow tax deferred as long as possible.)

Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.