"Free" Financial Seminars

Q: I have a friend in NJ who attended one of those "free" financial seminars. She took the bait and transferred her entire IRA to an Equity Index Annuity. She knows nothing at all about investing. Is she required to leave the money there for 14 years without paying a heavy penalty?

Of course, she'll have to start taking RMD withdrawals in 4 years. I explained that to her, but I haven't told her what I think of her investment, because if there's no way out, then it wouldn't do any good to warn her. I keep my husband's IRA in Vanguard Index Funds. The big selling feature was that she would never lose her principal. Isn't there something she can do?

A: It depends on how long she has been in. If it's within the free-look period then she can cancel. Otherwise, not much...

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