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Variable Annuity

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  • Variable Annuity

    So I am fresh out of Fellowship for 2 years now coming to the WCI game late but better late than never! I have recently refianced my student loans with Sofi and saving as much as I can - no fancy car (both cars paid off). My wife a physician and only debt student loans for both of us and our mortgage. We met with a financial advisor while I was in fellowship because recommended by colleagues. We fell into the Annuity trap. We both got into a Northwestern Mutual annuity with Life/retirement. We are about 14 months into it. We want out! what is the best way to get out and get the most of our investment (If I can call it that) back. I understand the surrender fees and tax on gains (if any) we will pay. It just bothers me that the advisor (salesman for a lack of better description) is getting paid a good amount from this. Thanks for the advise.

  • #2
    Sorry sackings but the annuity is probably a sunk cost.  Better to realize this at 14 months in rather than 14 years.


    • #3
      Thanks for the help. I stopped payments this month meeting with "my advisor" to get out. I figured I would lose out on this but wonder if there is anything I should watch out for if my advisor tries to make me get into something else? Or what is the average amount I should expect to lose out on? 30% or 50% of my investment.? Thanks for your comments


      • #4
        I wouldn't suggest closing out the annuity and paying the surrender charges.

        A better option may be to definitely stop further contributions, wait until the annuity's surrender charges end (probably 7-10 years), and the do a 1035 exchange to a low-cost no-load variable annuity like those offered by Jefferson National or Vanguard.