This depends on several factors, you should ask yourself, the insurance company, or your adviser the following questions to aid in your decision:

  1. Are you still happy with the investment options within the annuity?

    If you still like the investment options available within the annuity, then consider shifting more of your assets into bonds or the fixed interest account until the market hits a point where you are comfortable adding more money back into equities.

  2. How did your investments perform in comparison to the appropriate benchmark index (S&P 500, NASDAQ)? If you're finding that the investment choices lost more money than the underlying benchmarks, then perhaps you should change your asset allocation, select new funds or consider changing annuities.

  3. Is your annuity contract past the surrender period? This is very important, because some annuities can carry a surrender fee as high as 10% of the account value and last for eight to 10 years. Find out how much your penalty would be to surrender the annuity, prior to moving anything.

  4. What is your investment time horizon? If you still have more than 10 years before you plan on touching these funds, you may just want to ride out the storm and adjust your asset allocation more conservatively. If you have a shorter time horizon, then you may want to utilize the fixed account or look at other options.

  5. Do you still require tax-deferred growth of earnings? One of the nice selling points with annuities (non-qualified) is that the earnings in these contracts can accumulate tax-deferred over time. In standard brokerage accounts, interest and dividends are taxed in the year in which they are paid. Earnings are taxed in an annuity when they are withdrawn.

Once you've taken a look at all of these factors, you should have a good idea if the annuity is still a wise investment for your situation. (For more on this topic, check out Getting The Whole Story On Variable Annuities.)

This question was answered by Steven Merkel.

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