Consolidating funds from small annuity accounts to fund purchase

[Julia Parslow]

Over many years of traditional employment, we have acquired several small tax sheltered annuity accounts.  They were not great ideas to begin with and now we would like to consolidate all of these small funds into a real estate purchase that would generate better cash over time.  Taking into consideration a tax hit of about 10% to do this because we are not 59 1/2, but no surrender fees because the funds are older, does this make sense to reallign the use of these funds in a more profitable way?

Under what circumstances does this not make sense?