1. 61667 POINTS
    Steve Savant
    Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona
    Non qualified tax deferred annuities have surrender charges. In the early years, surrender charges can be expensive. Many annuities allow for a 10% free withdrawal, but the gain is subject to ordinary income tax. Market adjustment annuities that can change the interest rate credited to the policy if it's surrendered before the contract period, which to some is a liquidity issue.
    Answered on September 13, 2013
  2. 1000 POINTS
    Tyler Maddox
    Retirement Specialist, Cambridge Financial Group, Greenville, SC
    To expand on what Steve said already. There are a few other liquidity options with Fixed Annuities.

    Some (but not many) allow for 15% Surrender Charge free withdrawals.

    Also, most Deferred Fixed Annuities waive the Surrender Charges if you have a Long Term Care need, or if you are terminally ill.
    Like all withdrawals from Annuities, this would be subject to capital gains tax. Or if it is in an IRA it would be subject to Income Taxes.
    Answered on September 13, 2013
  3. 37376 POINTS
    David G. Pipes, CLU®, RICP®
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    Traditional annuities are very liquid.  They can be surrendered immediately with proceeds reaching you in a few working days.  They may have surrender charges depending upon the contract and the length of time it has been in force, so the full value of the annuity might not be available to you.  
    Answered on August 19, 2014
  4. 1976 POINTS
    Ronald Hinch
    Regional Marketing Director, Capital Choice Financial Group,
    If liquidity is a major concern then an annuity possible won't be the best place to put retirement money or extra money. This is called suitability and the agent should ask this question among others to determine whether an annuity is a good fit. However, if it is determined that an annuity is what the client should place his or her money then there is an out for a portion of the money without occurring any withdrawal charges. Most annuities provide a 10% free withdrawal in the case of an emergency. Bottom line is that annuities are not designed to be very liquid so if this is a needed benefit don't choose an annuity.
    Answered on July 14, 2016
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