Accessing Money in an FIA
Many FIAs today have surrender periods that are less than 10 years. Some even have surrender periods as low as 5 years or less. Along with that, most annuities also have a limited “free withdrawal” provision. This lets you (the buyer) make one or more withdrawals without charge each year. The amount of the free withdrawal is limited to a set percentage of your annuity’s guaranteed or accumulated value, generally 10% per year. Some annuities waive penalties if you are confined to a nursing home or diagnosed with a terminal illness. You may, however, still lose credited interest on withdrawals.
Withdrawals will reduce the contract value and the value of any protection benefits. Additional withdrawals taken over and above your annuity’s “free withdrawal” provision will be subject to a withdrawal charge. Because this is considered a distribution, all withdrawals are subject to ordinary income tax and, if taken prior to age 59 ½, may be subject to an additional 10% federal tax. You may also lose credited interest on amounts you withdraw.
Fixed Index Annuities are designed to meet long-term needs for retirement income. They provide guarantees against the loss of principal and credited interest, and offer the reassurance of a death benefit for your beneficiaries. Early withdrawals may result in loss of principal and credited interest due to surrender charges. Any distributions may be subject to ordinary income tax and, if taken prior to age 59 ½, an additional 10% federal tax. Terms and conditions vary by Carrier, product and state.
Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.