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Author: golfbagg Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75383  
Subject: Is there anywhere to rollover an annuity? Date: 1/30/2001 1:20 PM
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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?
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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 27554 of 75383
Subject: Re: Is there anywhere to rollover an annuity? Date: 1/30/2001 1:30 PM
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Golfbagg asks:

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?


No, there is no other way to move the money elsewhere and maintain the tax-deferred status on the gains. She either uses another annuity to improve her return by buying it through a 1035 exchange, or she surrenders the annuity and pays ordinary income tax on the gain to invest elsewhere in a taxable account.

Regards..Pixy

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Author: jrr7 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 27556 of 75383
Subject: Re: Is there anywhere to rollover an annuity? Date: 1/30/2001 1:43 PM
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Why not roll over the annuity with a non-predatory annuity company like TIAA-CREF or Vanguard?

If you do a 1035 exchange, there are no tax consequences of the switch.

With TIAA-CREF or Vanguard you can opt for the "fixed" plan (paying 6% or so) without any surrender schedule. Or you can invest in stocks, bonds, etc. but for a retiree that's probably not necessary.

Fees are much less and there's no sales pressure.

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Author: TTRoberts Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 27558 of 75383
Subject: Re: Is there anywhere to rollover an annuity? Date: 1/30/2001 2:00 PM
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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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Author: bigcaat Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 27844 of 75383
Subject: Re: Is there anywhere to rollover an annuity? Date: 2/12/2001 1:24 PM
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Just my .02 --

Look into Vanguard --

Work this out with an accountant you trust --

and

Don't trust the broker.

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