How do you get out of a Variable Annuity?

[ScrimpAndSave]

I could not get out till i changes jobs.

[noppenbd]

The way I calculate it, your VA is earning around 6% a year. I calculated that by solving for X:

68000 * (X)^4.5 = 89000

4.5 is the number of years it has been invested. X comes out to 1.061, which means 6.1% return.

Option 1:
-Leave money where it is. If 6.1% return continues, in another 5.5 years, it will be worth $123K.

Option 2:
-Cash out now and pay 5% surrender, take $84.6K and invest in regular mutual funds. Since you aren't paying the 2% in VA fees, assume the investment makes 8.1%. In 5.5 yrs @8.1%, the $84.6K grows to $129K.

In reality, 8.1% a year is investing pretty conservatively, so option 2 could actually win by a higher margin if invested more aggressively. Of course the market could tank as well so there are no guarantees.

[Scanner]

1. Get out of the annuity.

2. Send me the balance

3. I'll send you a check every month.

4. Promise.

[ScrimpAndSave]

I have to wait until I change jobs to drop mine. Annoying.

[10can]

I made this post a few months ago and my friend still has the Variable Annuity and I still do not fully understand how it works.

With stocks falling like they are, is a Variable Annuity a good thing to have right now?

Thanks