Ask Terry Questions Taking more from nature annuity

Taking more from nature annuity

By Terry Savage on October 01, 2018 | Financial Planning / Retirement

We have 114,000. In mature annuity and would like to take out about 50,000 to pay off our mortgage. That would free up 766.00 a month for us . We are 73 and retired. Not a lot of credit card debt but things are a little tight. Would like to be able to travel. Just short runs to the countryside in adjoining states. Just hope for some financial security and a happy retirement. Is there a penalty? Is this an option? Can we does this and still keep remainder in annuity

Terry Says

First, check with your agent to make sure that there are no surrender charges. And ask if there is any penalty for taking only a partial distribution.
Second, ask your agent to show you the portion of the $50,000 that would be taxable and the portion of the money that would be considered part of your original investment. (This assumes the annuity is purchased with after tax money and not inside an IRA).
You will definitely owe taxes on a portion of this withdrawal. So you may have to withdraw even more money to pay taxes!
Now weigh that possibility against the promises of continued tax-deferred growth INSIDE the annuity — and your potential need for that extra money down the road.
And remember that the interest on your mortgage is a tax deduction — although under the new tax laws with the higher standard deduction, that may not be a consideration any more.

Basically, this is a balancing act. What’s your total financial picture? What are your expectations about health and longevity? No one, except God, can give you the information to make make a decision based on fact. But a financial planner can help you understand the tradeoffs. Find a FIDUCIARY advisor who will just charge a fee for advice at

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