You can exit most annuities, but the mechanics matter more than a short video can convey. Most annuity contracts carry a surrender charge period, typically 5–10 years, during which withdrawing beyond a small penalty-free amount (often 10% annually) triggers a declining surrender fee set by the contract, not by federal law.

The IRS permits a tax-free transfer between annuities, or from an annuity to certain other annuity or long-term-care products, under Internal Revenue Code Section 1035. A 1035 exchange avoids triggering ordinary income tax on the gain, but it does not waive your insurer’s surrender charge — those are separate, contractual issues.

Withdrawals from a non-qualified annuity before age 59½ are also subject to a 10% early-withdrawal penalty under IRC Section 72(q), on top of ordinary income tax on the gain portion, unless an exception applies. Before exiting any annuity, request your contract’s actual surrender schedule from the issuing insurer and confirm your numbers with a fee-only advisor — this varies by contract and cannot be generalized from a single video.