The Ultimate Guide To Annuities

Your One-Stop Resource for Retirement

What if I decide to withdraw the money?

Withdrawing money from an annuity is a decision that shouldn’t not be taken lightly. This kind of movements will generate high costs that you need to consider in your retirement plan.

The amount that you will be required to pay will depend on a few factors, for instance:

If you decided to withdraw your money before turning 59 ½ years, you must pay a 10% penalty and a regular income tax over the gains of your investment but the amount contributed to the annuity will be tax-free.

Similarly, if you decide to withdraw your money during the first seven years after buying the annuity you will be required to pay to the insurance company a surrender charge. These charges usually represent a 7% of the investment and it will decrease around 1% per year but in some cases the surrender charge ascends to 20%.

Share This