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Greetings, Pbraedyn, and welcome. You wrote:

<<I have had X variable annuity for 6 years. It is currently parked in a value fund that has been doing pretty well. These are "B" shares which I think means that costs are paid up front. I'd say I've gotton 20% gain on my investment over the past six years. The original investment was a roll-over from a 401K. The penalty period (7 years) will be up in 2000. Can I roll it into an IRA? Can I invest in individual stocks within that IRA? Would this make sense money wise? Is conversion to a ROTH a viable alternattive? >>

Yes, after you surrender that annuity the net proceeds may be transferred to any other IRA of your choosing to include a self-directed IRA at the broker you prefer. The latter is the type of IRA that lets you trade in individual securities like stocks. However, you purchased "B" shares in your annuity subaccounts. Those are not front-loaded shares, but back-loaded. Therefore, a sales charge may apply when you surrender the contract despite the fact there will be no surrender penalty. Whether a switch makes sense or not, I'll leave to you because you are the only one who can decide that issue based on a comparison between the annuity and whatever alternatives you are considering. A Roth conversion is an alternative, but look carefully at this because much depends on tax rates now and in the future, how you will pay income taxes due on the conversion, and a few other issues. For some considerations, see my column entitled "Convert or Not?" available in the archives in the Managing Your Retirement area at Keep in mind that at age 48 you also must consider the 10% penalty issue on conversion to a Roth because you are under the age of 59 1/2. In your case, then, using the annuity proceeds to pay any income taxes due on conversion will definitely make it a non-starter.

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