If you withdraw the "principal" from non qualified MYGA before turning 59.5, does that trigger IRS, and State penalty? Some insurance companies allow partial withdrawal of the principal with no penalty which would be the free out you mentioned in this video. I would like to know how the IRS and states treat withdrawing the principal from MYGA before you turn 59.5.
@QueensWino
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I have yet to see any advisor or agent discuss what might happen if a client stayed in the MYGA after the guaranteed period ended and did not 1035 out. Would the annuity change to "book value" status in that the crediting rate would potentially change each year? Or might the company extend another multi-year guaranteed rate? I'm guessing most clients do switch out but perhaps not all do. After all, the client would be "out of surrender" if he/she stayed in and would be more liquid than in a new annuity with a fresh CDSC.
@DonAndersEasyMoney
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It depends on the company. Many will renew your term at the current interest rates if you fail to notify them of your intentions. Some companies will change the interest to the contract guaranteed minimum (typically 1%) and keep the money liquid. Whoever you work with, make sure they set an appointment with you 3 months before the term ends and go over the options.
@QueensWino
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@@DonAndersEasyMoney Thanks for the quick response! Staying in with just the guaranteed minimum wouldn't be so great in my view...
@DonAndersEasyMoney
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@@QueensWino exactly. That’s why we always recommend looking at options. Usually it makes sense to 1035 exchange the policy, but it all depends on the policy
@randall7012
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What are the best companies for 3 year For monthly income
@DonAndersEasyMoney
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You need to meet with a financial advisor. Rates are different based on age, state, amount invested, etc. You think it’s a simple question but it doesn’t have a simple answer. Best of luck
@randall7012
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Why can’t anyone answer this simple question 1. Can you take out $ monthly for income. 😮
@DonAndersEasyMoney
Жыл бұрын
Depends on the policy. Some allow for monthly income, some allow for annual, some don’t allow any distributions during the surrender period without a penalty.
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