Direct answer
It depends on your specific contract terms, as many annuities restrict lump sum withdrawals to prevent surrender charges and tax penalties. If your contract is in the accumulation phase, a full withdrawal may be possible but could trigger significant surrender fees and ordinary income taxes.
Internal Revenue Service publication on annuity taxation and standard annuity contract surrender schedules. For additional information about the tax implications of annuity distributions, see the Internal Revenue Service’s guide to pension and annuity income.
What this means for you
It depends on your specific contract terms, as many annuities restrict lump sum withdrawals to prevent surrender charges and tax penalties. If your contract is in the accumulation phase, a full withdrawal may be possible but could trigger significant surrender fees and ordinary income taxes.
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