Can You Cash Out Annuities? 
You can cash out your annuity and here are some of the ramifications of doing so . If you cash out your annuity -LRB- or surrender the annuity -RRB- and that surrender will trigger an ordinary income tax event on the gain in the policy . If youre under age 59 an additional 10 % penalty will be assessed as well . If the annuity is a non-qualified annuity , the taxable event will only apply to the gain in the contract . If the annuity is a qualified annuity , the taxable event will apply to all the proceeds in the contract . 