Wife is a teacher and has a equity indexed annuity

My wife has a Americo Equity Indexed Annuity, she set up on 2/2001 @ $100 a month. Total accumulation value as of 9/30/2008 is $9,834.60 with a surrender charge of $1,239.12. Participation is 60.00% with spread of 4%. What should she do with it? I feel that she should contribute to a roth ira for 2008, and from now on...and then look into other investments. I don't like this annuity she has now. Thanks for your help. Happy New Year! :confused:

LAKE MEAD,

Typically annuities are sold. The SEC has some very good articles that everyone should read before they purhcase an annuity. http://www.sec.gov/cgi-bin/txt-srch-sec?text=annuity&section=Investor+Information&x=14&y=4

Your idea of investing the $1200 (or more) in a ROTH IRA is a good idea.
Be aware, you may be receiving a tax deduction on the payments to the annuity. That would not be the case with a ROTH IRA.

Your wife should also watch that surrender charge go down and when it is near zero, then she should move the annuity balance to her Traditional IRA. Read the annuity contract to determine when the surrender charge goes away.

I grew-up in Pennsylvania Dutch country. We always have a custom of eating roast pork and sauer kraut for dinner on January 1. It is supposed to bring good fortune for the year.

Thanks for the link and info. She will stop contributing to the current annuity she has, and pursure other investments via 403(b).