Can I take money out of an annuity?

Usually you can take out a portion each year. Withdrawing more during the surrender period can cost a fee, and David shows you exactly what that would be.

More detail

Here's a common situation. You put money into an annuity, and two years later your roof needs replacing. Most annuities let you take out part of your money each year. Take more than that during the surrender period, and a surrender charge may reduce what you get back.

A mistake to avoid: putting your emergency money into an annuity. Keep enough cash on hand for surprises, so you don't have to dip into the annuity early.

Two more things to know: • Many annuities are tax-deferred, which means you don't pay taxes on the growth until you receive payments. Check with your tax advisor about how withdrawals would be taxed for you • After you buy, state law gives you a set number of days, typically 30 to 60, to cancel and get a refund

What to have ready: your other savings, when you might need cash, and the income you'll need.

Before you decide, I'll show you the surrender schedule and withdrawal rules in writing.