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.
An article on indexed annuities appeared in Bloomberg yesterday (click here to read).
The article is substantive and comes from a credible source. It is provides a good explanation of why surrender fees need to be a front-and-center consideration for any consumer considering the purchase of an...
