I Have A Qualified Variable Annuity. What Is That Exactly? 
That is a great question ! I 'd strongly advise that you check with your annuity 's agent or your tax adviser before doing anything . You mentioned that you were willing to pay penalties and taxes , so I 'm assuming that there is a pressing need for cash , or a great dislike for the policy/agent/company that has caused you to decide to gut your annuity ? If so , I 'd again advise caution . If you surrender your annuity , and it was meant to fuel your retirement , what is your plan to replace it ? Will you end up suffering for many years for a temporary hardship if you surrender the annuity ? Maybe it might be wiser to see what cash withdrawal you can make from the annuity without fees -LRB- you are allowed a certain amount without penalties or fees , and more if you are willing to pay any surrender fees that may still be applicable -RRB- and leave the annuity intact ; you may also want to look at borrowing from a cash value of any whole life policy that you may have , as that also is a quick and relatively painless way to get cash . If your heart is set upon surrendering it , please bear in mind that there will be a 10 % penalty , possible surrender fees , and a major tax bite from the amount that you might expect to get . Please assume that if you are lucky , you will recieve roughly half of what you are expecting to receive , depending upon your tax bracket . This type of investment is designed specifically for saving , and stopping the process is very costly . To start the process , contact your agent who sold you the annuity , or the plan administrator , and tell them of your intentions . If you would like to discuss this further , please do not hesitate to contact me , okay ? I 'd be happy to help . Good luck , and thank you for asking ! 