Annuities account closing or withdrawal at 59.5

[rogert]

Good Afternoon,
I have a concept which not 100% sure correct or not. For Annuities account, can I close or fully withdrawal all money after reaching 59 and half years old without any penalty, in general?
Mine is actually Transamerica (transferred via Vanguard without my consent), value Variable Annuities

Thanks

 

[Sunset]

Your annuity contract will specify the rules.

Tell us when did you buy it, and people can tell you generally common rules, but you will still need to read your contract.

 

[rogert]

Annuities closing at 59 and half

When you say "Your annuity contract will specify the rules", that means whether penalty or not, it varies by contract. In other words, my "concept" of 59.5 threshold for no penalty in general is not true. I thought I am quite financially literate but I guess I am just kindergarten grade
Will try to find it again but Transamerica is not user friendly like Vanguard! I actually bought it about 8 years ago from Vanguard but it was unwillingly transferred to Transamerica about 3 years after Vanguard "discontinued" Annuities business, etc

 

[Sunset]

My experience with annuities is they are a contract, so I'm thinking that is what you have.

My comments are because I'm thinking you have a annuity contract.

It would be paper documents about 10->20 pages in length. Probably filed away somewhere.

The contract will specify how much can be withdrawn and when withdrawals are allowed.

So it's really important to find the paperwork.

The 59.5 age will really have nothing to do with the annuity from the ones I've seen.

 

[MarieIG]

It depends.

Since you are past 59 1/2 you should not be subject to a 10% early withdrawal penalty.

Next - you would look at your annuity contract to see if there are any penalties for withdrawing prior to a certain time period.

Then - you would look to see if you have any gains to access tax consequences for a straight withdrawal. (You may also wish to consider a 1035 exchange if warranted.)

BTW, yeah - I had the "Vanguard" annuity which was transferred to Transamerica for handling. (I am trying to keep my holdings in low-cost sub funds.) I don't see a penalty should I withdraw at this time, however it has built in gains (the gains are more than the cost so I'm not pulling it at this time).

 

[rogert]

Thanks, you are doing great that your gains is even higher than cost. I made a "stupid" mistake from the advice of getting conservative pre-retirement. Investing in Bond index instead of stock made me losing even before taking into inflation adjustment. I think Transamerica also charge a hefty fee by doing almost nothing made me lose even more. Wanted to get out of it before losing my principal. thanks for confirming no early withdrawal penalty, I will dig through the papers and contract again to make sure no other surprise fee before pulling the plug

 

[Jerry1]

Is your annuity in your 401K or an IRA? I ask because you mention 59.5 as an age issue. Plus, I have an annuity in my IRA. The reason that matters is that you could cash out the annuity and if it’s in an IRA, you can leave the money there. Then you can figure out how best to withdraw money based on your overall situation.

 

[Mark1]

The good news is that it is unlikely Transamerica can update (change) the rules/contract with the exception of maybe your investment options and underlying fee structure. I also suspect that the product Vanguard sold you had a declining penalty structure and after 8 years is likely gone. DW had one at Fido from the 1990s that counted down the first 7 years.

One item to remember is that with partial withdrawals, the taxable gains come out first, followed by the non-taxable basis.

 

[rogert]

Well, my annuities is not IRA or 401K. I just parked money there at that time as "retirement" asset. Just can't believe it could "lose" when I was trying to be conservative investing in bond index! Now, as I reached 59.5, just wanted to invest it somewhere else (low or no fee) and without at least the early withdrawal penalty. Even the current CD rate of 5% can easily beat the return in Transamerica! just hope there will be no other fee when I withdraw or close the account, finger crossed!

 

[Sunset]

Find the contract, read it, and come back to ask questions.... No sense in paying a big penalty or losing a lot of money for making a withdrawal mistake.