annuity

[carguys]

I recently transferred $15000 from my saving account into a 7 year deferred annuity from Met Life.If i should cash out and transfer back into my savings account what would be lost from the $15000 principle.Also would i have to pay any income tax on the principle come tax time.Thanks
Tony

[disneysteve]

Annuities typically have surrender fees that are pro-rated over time. You need to review the annuity contract. That should spell out exactly what the penalty is for cashing out.

I don't think there would be any tax implication since there wouldn't be any gain. On the contrary, you will have lost a chunk of money (but I don't believe that creates a deductible loss either).

[Robert742]

If you are under 59 1/2 years old, there may be a 10% tax penalty. If you just started the annuity, you may still be under your "free look" period.

Talk to your tax advisor or Metlife about the implications of withdrawing the 15k.