Can I Withdraw Variable Deferred Annuity Money Prior To The Commencement Date?

I opened an variable deffered annuity in 2012 – the commencement date is 2064. Does this mean I cannot start withdrawals with my money until 2064?

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Jim Winkler
CEO/Owner, Winkler Financial Group, Houston, Texas
That is a great question! Insurance companies will set a commencement date far enough ahead into the future to show you an impressive number for your return, and that is the date by which you must have started taking your withdrawals. The truth is that you can take money out at any time, BUT- there are serious consequences if you aren't careful. An annuity is not a suitable product for someone who has cash flow issues, and might need the money sooner than later. I'd advise you to look at your policy, and look for these things: Do I have a free withdrawal amount, if so, how much and when can I start taking it? How long is the surrender period, and what are the charges? (If the surrender period is ten years, that means every year during that period, whatever you withdraw will be subject to that fee, among likely others, as well as a federal penalty of 10% if you are younger than 59 1/2) The last thing to look at is what triggers if you pull money out. Does it start, or lock in a payment cycle for you? Again, that could be disastrous if you aren't very careful. Let the money ride in there as long as you can afford to, ( at least until you are 60) and then start taking your withdrawals. Depending on how your annuity is structured, you may be required to start your rmd's at the age of 70 1/2. If you'd like help with your specifics, please contact me, I'm happy to help. Thanks for asking!
Answered on June 17, 2014
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