I have a variable annuity with Van Guard. I wouldlike to withdraw money from it and contribute to my wife's IRA and mine also.I assume that the VA at Vanguard is an unqualified annuity (not in any retirement account). In that case, if you withdraw everything from the VA, everything in excess of the premiums will be taxed at ordinary income tax rates and, since you are not yet 59.5 years old, 10% federal penalty (plus any state income tax and penalty). If you don't withdraw everything, the ordering rules are such that the first monies out are earnings.If I recall correctly, Vanguard doesn't have any surrender charges.Generally, you would be better off finding new monies to fund the IRAs.The the VA is in a qualified account like a 401(k), 403(b), Traditional IRA, Roth IRA, or the like, then you have to follow the rules of that type of account. Usually, though, the Vanguard representatives will advise against placing a VA inside any tax-favored account.
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