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I talked to a broker about transferring my traditional IRA variable annuity to an IRA account at his office. I haven't done any ivesting through a brokerage firm, so I'm not sure about what was said. I was told that a variable annuity could NOT be transferred. He said I would have to contact the company, tell them I wanted to close the account and then they would send a check DIRECTLY to me. After I received the check, then I would send a check for the amount of the IRA funds to the brokerage firm to be deposited in that IRA account,which I haven't opened yet. My plan is to use these funds to invest in the F4. I have a couple of questions:

First of all, I'm not close to 59 1/2 and I will be charged a 1% surrender fee to get out of the annuity. Isn't there a huge withdrawal penalty if I take possession of IRA funds?

If the answer is yes to the previous question, then how do I get out of the annuity and into a IRA account at a brokerage without any penalties?


I thought all I had to do was open the account, fill out transfer papers, send that to the brokerage and then they would take care of notifying the insurance co. where the annuity is held. I'm very confused about how to do this.

I would appreciate all the Foolish help I can get!

Thanks in advance.

Jean
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