Fixed Annuities | Withdrawal options that can be contractually exempt from surrender penalties.

Fixed Annuity | Lump sum withdrawal options contractually exempt from surrender penalties.Show more

Interest Only
Lump sum, usually based on the current accumulation value earned since the last anniversary.

Systematic withdrawals of interest as earned.
Usually based on the current accumulation value. Usually taken monthly or annually.

Cumulative Interest Only
The ability to withdraw all interest earned since policy issued. 10 year contract in 5th year can take 5 years of interest.

Lump Sum Based On A Percentage
Commonly seen as a 10% Annual Free Withdrawal (However, 15% annually does exist)
Often Based on current accumulation value.
Can be limited to the value as of the last anniversary.
Can be based on the initial premium at time of issue
Can have a cumulative feature. If not used in a previous year, the 10% can be accumulate to 20%. Basically getting to use the unused amount in a past year. Usually capped from 20% to 50%.

(RMD) Required Minimum Distribution
Often referred to as RMD friendly, this is the ability to withdraw the RMD without penalty even if the RMD amount exceeds the free withdrawal provision allowed in the contract.
Can not be combined with the other withdrawal provisions. So, in a 10% free withdrawal contract, if RMD is 4%can not also take 10% = 14%, but can take the remain 6% of the 10%.

Fixed Annuity | Free Withdrawal Limitations.
All can be limited by the contract language.
Minimum withdrawal amount, from $100 to $1,000
Limited amounts of withdrawals, only a certain number of requests per year, example 2 per year.
Allowed by current company practice. This where the contract is not clear or does not allow withdrawals but the carrier is allowing the feature currently. This can change base on the company at will.
Company illustration can do a terrible job showing the withdrawals, if they do at all. This is why the contract language is the best place to find the free withdrawal provision features.
BE AWARE: If a full surrender or more than the free amount is withdrawn, some carriers will impose a surrender charge on entire withdrawal.

Withdrawals may be subject to ordinary income taxes and, if made prior to age 59½, may be subject to a 10% IRS penalty.

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IMPORTANT INFORMATIONThis material is for informational or educational purposes & is not a recommendation to buy, sell, hold or rollover any asset. It does not take into account the specific financial situation, investment objectives, or need of an individual person. Withdrawals may be subject to ordinary income taxes and, if made prior to age 59½, may be subject to a 10% IRS penalty. Surrender charges may also apply. All guarantees are backed by the claims-paying ability of the issuer. Available in jurisdictions where approved.

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