Allen,
I am sorry to hear about your mother's condition and I am happy to hear you are taking care of her financial affairs.
I would consider rolling over your mother's IRA into another IRA without an annuity, unless you like the guarantee aspect and plan to start the payout phase (annuitize).
Below is a brief breakdown of how variable annuities work.
A variable annuity has two accounts.
1. The cash surrender value/Account Value
According to my calculation, the actual account value made less than 1%. 126k initial investment over 15 years and now at 145k.
2. The benefit base = fictitious account
If your mother was guaranteed 4% over the last 15 years, the benefit base would equate to $226,918.
Since she took out 21k in 2009. Adjust values accordingly.
Here is the really important part. If you do not plan on annuitizing the variable annuity, you do not get any value in the 4% guarantee income rider. When she passes away, the beneficiary will only get the cash surrender value, not the benefit base.
Things you need to know and consider before making a smart decision:
1. Understand the Income Riders
a. Does your mom have a Guaranteed Lifetime Withdrawal Benefit (GLWB)?
i. If she has a GLWB, she can take x% a year each year for life. The annual amount will reduce the cash surrender value.
ii. If she takes more than x% a year, the withdrawal will reduce the cash surrender value and a proportionate % of the benefit base.
b. Does you mom have a Guaranteed Minimum Income Benefit (GMIB)?
i. If she has GMIB, she can take x% a year.
ii. After you annuitize, you do not have any access to the account value.
2. Find out how much the benefit base is.
3. Since there are income riders (the 4% guarantee), you are paying for that benefit. It is hidden. How much is the question. This may be another reason why the account value is so low. When you strip down annuities and really find all the expenses, I have seen them as high as 4-5%.
4. A variable annuity in an IRA makes no sense, unless she did it for the guaranteed income. There are no tax advantages.
After you determine this information, you can run the numbers if it makes sense to hold onto it or roll it over into another IRA.
Annuities in general are sold because they offer guarantees, tax deferral, and prey on people's emotions. There are a places where annuities make a lot of sense, but I find too often annuities are sold to the individual for the wrong reasons. They usually provide the insurance agent with the biggest upfront commission.
When you are not comfortable or do not fully understand the details, I always recommend working with a fee-only financial planner. They have a fiduciary responsibility to their clients and never sell products. There is a big difference.
On a side note, I would double check her estate plan and beneficiary designations to make sure everything is aligned and your siblings can take advantage of stretch out provisions.
I hope this helps you and your family. I wish you the best of success!