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Surrendering vs. Selling Annuity

SURRENDERING VS. SELLING & WHEN TO SELL YOUR ANNUITY SURRENDERING AN ANNUITY First, know the difference between selling and surrendering. If you surrender a full or partial annuity: 10-15% Wait until any surrender periods are over. Check your contract to see if surrender charges apply: if applicable, they typically range from 7 to 15% of the amount you plan to withdraw from your annuity. Surrender fees often decrease 7-10 by a percentage point each year, known as the surrender period -- which lasts between 7 and 10 years after you buy YEARS an annuity. %24 If you purchase a variable annuity with bonus credits (for example, where the insurance company adds a 3% bonus to every payment you make), these annuities have higher surrender charges and a longer surrender period. SELLING AN ANNUITY NO SURRENDER CHARGE When selling payments, you will not pay a surrender charge; however, companies will subtract a variable discount rate from the amount they give you for those payments. TIMING PLAYS A KEY ROLE IN MAXIMIZED EARNINGS & EARLY RETIREMENT Some Americans consult financial and retirement planners, and realize that in order to maximize their beneficiaries' inheritance, they need to cash out their annuity far sooner than they expected to maximize earnings. 48% This can help avoid late retirement. This is important, RETIRE LATER THAN EXPECTED given that 48% of Americans now retire later than expected. FINANCIAL EMERGENCY Up to 100 million Americans will get an annuity in the future; tapping into these funds is always an option in a financial emergency. %24 29% of people don't have money set aside to cover emergencies. 1/4 has more credit card debt than AMERICANS emergency savings. SOURCES: are-one-emergency-away-from-financial-ruin Brought to you by: (123 LUMP SUM %24

Surrendering vs. Selling Annuity

shared by lumpsum on Sep 11
This describes the difference between selling and surrendering your annuity and the benefits of both.




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