See if this situation sounds familiar…
I recently had a call from an individual who had left his job, and he needed to roll over his 401(k). Not having a financial advisor, he relied on the referral of a neighbor on who he should work with.
Without doing any more research, he met with the advisor, and the advisor recommended that he roll over his 401(k) into an IRA annuity (note: this isn’t an actual product, just a term for buying an annuity inside an IRA).
Upon learning more about the advisor, the individual felt uncomfortable working with him, and he began to wonder if the annuity was in his best interest, or the advisor’s. Wanting to know his options, he called me.
When it comes to wanting to cash out or cancel an annuity, this might not be every situation, but it does bring up an interesting discussion: what it takes to get out of an annuity.
Before I start, I should make a point that there are many types of annuities: fixed, variable, indexed, immediate, etc. This post is to be more general in nature, so some or all of the information may or may not apply, depending on the type of annuity we’re talking about.