I need some advice about a couple variable annuities that my wife and I are kind of stuck with.
Metlife, series L $38000, $8300 growth
Pacific life, pacific value $28300, $4200 growth
Both of these have been sitting long enough without any additional funds added, so there are no surrender fees.
We are both in our late 30s and don't feel the need to have annuities, with their high fees and such, and we'd like to just be investing our after-tax money in regular mutual (index) funds.
The rest of our holdings are:
$46k Roth
$100k cash (we are in the process of moving this around, and also maxing out a 403b for 2013 that only became available recently.
$46k student loan, fixed at 2.75%, $315/month payments.
No mortgage (renting)
I want to move our annuities to vanguard, and the main question is should we bite the bullet and take the hit in taxes (ordinary income tax plus 10% penalty for pre-59.5 withdrawal). We are on the cusp of the 15-25% bracket.
Or, should we do a 1035 exchange to a vandguard annuity (VVA), which has fees in the area of 0.48%. The current fees are in the 2.5% realm.
Thanks for the help!
Mark