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Retirement Saving for retirement - questions about pensions and pension schemes, 401k's, public and private company pensions, and other saving schemes.

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Old 03-23-2009, 05:15 PM
lgreenberg lgreenberg is offline
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Default “What if I need my money a couple of years down the road?"

Fact: There are consumer-conscious variable annuities that do not assess a surrender charge if you withdraw funds.

It’s important to keep in mind that variable annuities are long-term investments designed to help you meet retirement and other long-range goals. Withdrawals made prior to age 59 ½ may incur a 10% IRS tax penalty. It is likely that a VA is not appropriate for any assets that you will need prior to age 59 ½. But for any assets that you will not need until after age 59 ½, you may want to consider a flat-insurance fee VA to maximize your potential returns through the benefits of tax deferral. Please consult with a tax advisor for any potential tax consequences when making a withdrawal from your variable annuity.

In addition, if you recently purchased a traditional commission VA, you may still be in the “surrender period” and subject to a “surrender charge.” The surrender charge is an asset-based fee that may start as high as 7%, but will decrease to 0% over the course of the surrender period, which is typically the first 5 to 7 years of your contract. The surrender charge helps the company to defray the commissions paid to its salesperson if the annuity does not stay on the books “No-Load” VAs do not pay a commission to a salesperson and do not have a surrender period or a surrender charge.
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Old 03-23-2009, 05:56 PM
GarySpicuzza's Avatar
GarySpicuzza GarySpicuzza is offline
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Default Re: “What if I need my money a couple of years down the road?"

Quote:
It is likely that a VA is not appropriate for any assets that you will need prior to age 59 ½.


NOT necessarily, see the linky below:

Exceptions to the 10% Penalty of IRC Section 72(t)

Best regards,

Last edited by GarySpicuzza; 03-23-2009 at 05:57 PM. Reason: Brian playing with my linky.
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