I I'm mid 40's and have $300K to invest.

What are the pit falls with these types of vehicles and what othet options are out there?

Remember one thing about an annuity.  It is looked at as INCOME and you do not get the tax break a stock can give after owning it for over a year.  You have to start withdrawing it at age 70 1/2 too.

Variable annuities are expensive.

An annuity has administrative fees, the fund choices can have their own additional administrative fees, there can be an additional charge for the life insurance aspect of it.  You may be paying
a lot for the investment part which will reduce your returns.

There will be a fee for any riders - guaranteed annual payout, etc.

There is often a substantial penalty for withdrawing your money for a period of time (like 3 years) to make up for the fees they would have charged.

There are sometimes requirements regarding the distribution of your investments - ex. 30% must be in bond funds.

There may be a requirement to annuitize at a certain age - ex. at age 85, the insurance company takes all the remaining funds and pays you a set amount for the rest of your life.

The contracts are complicated and the salesman (even if he calls himself a financial planner) makes a substantial commission, so his main interest is selling, not helping you.

Know what you are getting into and evaluate if it's worth the expenses and restrictions over what you would have with a 401k.

You may be better off putting the money in a low fee brokerage, getting bigger returns on the money, and buying the annuity (with a guaranteed payout) when you retire.  
That's as opposed to paying all the annuity fees for the next 20 or so years.

Another thing to consider is a Roth IRA, if you can pay the taxes on the 401k withdraw.
Taking the tax money out of the 401k distribution leaves you with much less to invest and may not be worth it.

A Roth will let you take the money tax free at retirement.

YOU MUST READ AND UNDERSTAND EVERY WORD of an annuities contract. They are generally NOT WRITTEN IN YOUR FAVOR. They are loaded with fees, restrictions, fees, no tax benefits usually, fees.................

As someone mentioned, you likely would be far better off doing a partial rollover into a Roth RA. That way you only pay the taxes on the $ amount you move each year. Ex. $300,000 split into 5 years = $60,000 in additional income for that year. Will increase your taxes some but not as much as the entire amount.

Once the money is in the Roth IRA and seasoned, you will only pay penalties for early withdrawals if taken. Your growth in asset value and your gains on the sale of assets is not taxed either IF I REMEMBER CORRECTLY. (It has been a long time since I worked for Fidelity) It can be passed to your heirs if desired. Get in touch with Fidelity, Vanguard or somebody like that and STUDY the subject. Tons of info online. Read Roth IRAs for Dummies, Rollover for Dummies. All the above can be found on the web.

Once you move the money, either stick with the current mix of assets that are in the 401k (if you're happy with them) or take a hard look at Index funds. Long term they have generally equal or better earnings/value performance than the highly managed (high fees/front end loads) type mutual funds. In a normal market, index funds historically out-perform mutual fund managers 85% of the time. In other words, only about 15% of MF managers actually provide any real benefit to the shareholder.

Im me if you have any question. I'll try to help if I can with info.

Good luck.

stay away, they're for people that don't know much about managing their money

Do not do it.

wealthfront

his money is already qualified money, so that point is moot.

Op....there are only a few instances where a VA actually is worth a damn.

If you can track me down, I would be more than happy to answer questions. I can't solicit on here. I never posted my name or my firm, but if you can find me I may answer my phone.

This sounds like you either talked to the bank broker or some insurance only agent.

There's a bunch of douche bags north of me who only sell annuities and are considered Estate Planners. They sure talk a lot of shit on the radio.

I'd be worried about the insurance company underwriting the annuity. Some big names went under in 2008 and there's no reason to think that won't happen again. 

My favorite part is how the insurance company has a higher rating than the holding company and they want you to not worry about that.

I and my finance guy have both avoided and not been a supporter of annuities;however, I did roll over some funds to AXA Structured Capital Strategies.  An annuity but a bit different than traditional ones that I can tell...at least enough to get me to look at them.    Different terms available, partial market downside protection available, capped market upside potential.

edit: What is it that is making you want to get out of your 401K?

That's what I was hinting at, it's basically structured notes inside of a VA.

Great.  That makes me feel better.   That "annuity" label still left me with a little warning tingle and the first time my guy mentioned it, I was .  They seem to have done well for me  earning close to cap in the different segments we went into.

you could have done much worse

oh I have ...just trying to forget about it but know I won't

We all have made mistakes. I owned Cisco Sytems when it was trading in the $70s

It's a bad idea.  There are so many other options it would be difficult to tell you all of them.  Anyway, without a better picture of you and your finances, how would any of us answer intelligently?  Tell us more about yourself.  Are you employed?  Does your employer have a 401(k)?  Do you have other retirement accounts? Are you maxing out your 401(k)?  How do you look at 40 with respect to retirement savings?