Early Withdrawal Definition | Annuity Digest (page 2)

Early Withdrawal

You get tax breaks for setting up a retirement savings account such as a 401K, IRA or Roth IRA but you cannot access the money until a certain age limit or at retirement. In order to make an early withdrawal, you get slapped with a number of penalties such as a 10% early distribution charge plus regular income taxes. There are exceptions to these penalties: the death or disability of the owner, first-time home purchase, payment of unreimbursed medical expenses which exceed a percentage of gross income, higher education fees or to pay medical insurance premiums if the holder has received unemployment compensation for more than 12 weeks.

Florida Considers Legislation Intended to Protect Seniors from Inappropriate Annuity Sales

The state of Florida is considering legislation that would impose third degree felony charges and a maximum of five years in prison for insurance agents who provide misleading annuity representations ("twisting") and inappropriate policy surrenders or withdrawals (" churning "). "Under the bill, which would apply to sales in Florida to people over 65, the surrender periods — or the length of time an investor must keep an annuity — would be set at a maximum of five years. The surrender fee — or...

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