It's difficult to provide an in depth response without having some more detail on the type of annuity and your overall financial profile. That said, here are some points to consider and potentially present to your financial or tax advisor:
- Let's assume that you have a variable annuity. Variable annuities can be very expensive with total fees ranging from 1.5 - over 3 percent. High fees are a huge drag on investment performance so this is a real consideration. This site publishes a basic database that has fee information for hundreds of different variable annuities. Think about doing some basic research or asking your financial advisor to understand what total fees are for your product.
- You really need to understand whether you would incur surrender fees / surrender charges if you terminate your annuity. You may be beyong the time-frame that these fees would apply, but you want to look at the product prospectus or ask your advisor if they apply to avoid any fees.
- Keep in mind that not all variable annuities come with high fees. For example, Jefferson National provides a very interesting low fee variable annuity.
- Annuities--including variable annuities--are tax advantaged products. These tax advantages are meaningful. You should consider this in light of any change and discuss with your advisors.
- The reality is that most people use variable annuities for investment growth and tax advantaged accumulation purposes. In other words, the vast majority of people never turn-on or use the income generating features associated with their variable annuities. Maybe this is relevant to you and maybe it's not. If you are not going to use the income features, though, you may want to reconsider how much you are paying for what is simply being used as a tax advantaged investment vehicle. There are lower cost options to capture tax advantages (such as the Jefferson National VA mentioned earlier). In addition, if it is guaranteed lifetime income or pension like income (the real value of annuities) that is of interest to you, then there are possible more efficient and less expensive ways to achieve this such as deferred income annuities, longevity insurance and qualified longevity annuity contracts (QLACs).
Hope this is helpful.