Access to Your Money
What if I need to access my money during the accumulation phase? Annuities are designed to accumulate money for retirement. Hence, they provide their best possible benefit if left intact. This is without taking out any withdrawals. Some of our products offer withdrawal options in your annuity that include 10% penalty-free withdrawals. and first-year credited interest withdrawals. Be careful here, some annuities only allow 5% or interest only so please make sure you understand what options you have before you purchase an index or fixed annuity.
Withdrawals may be subject to early withdrawal charges and taxes. Meaning, if you take over the allowed amount of (5-10%) you will have to pay surrender charges and you will always have to pay taxes on any profits you made.
Doing your annuity homework? Start with our free comparison guide and the 7 questions to ask any advisor. Ready for real numbers? Talk to a licensed advisor in your state — we serve all 50 states.
Understanding Surrender Periods and Emergency Access Options
Most fixed and indexed annuities come with a surrender period — typically ranging from 3 to 10 years — during which withdrawals beyond the penalty-free allowance trigger surrender charges. These charges usually start higher in the early years (sometimes 7–10% of the withdrawn amount) and gradually decrease each year until they reach zero at the end of the surrender period. Knowing exactly where you are in your surrender schedule before making any withdrawal can save you significant money.
Many annuity contracts include provisions that waive surrender charges under specific hardship circumstances. Common waiver triggers include terminal illness diagnosis, confinement to a nursing home or long-term care facility, and in some contracts, disability or unemployment. These riders vary by carrier and product, so reviewing the contract language carefully — or asking your advisor directly — is essential before assuming you qualify.
If liquidity is a genuine concern, one practical strategy is laddering annuities with staggered surrender periods. This approach ensures that a portion of your funds becomes fully accessible at different points in time, giving you flexibility without sacrificing the growth potential that longer-term contracts typically offer.
Required Minimum Distributions (RMDs) are another access consideration for annuities held inside an IRA or qualified retirement account. Once you reach age 73, the IRS mandates withdrawals regardless of surrender schedules, and most carriers accommodate RMDs without applying surrender charges — but always confirm this with your specific contract terms.