Annuities
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What is an annuity?
An annuity is a contract in which an insurance company makes a series of payments. There are two primary types of annuities, immediate and deferred. In an immediate annuity, once you purchase it, you create a stream of income and begin getting paid. In a deferred annuity, once you purchase it, you let it grow (the accumulation period) and receive income at a later date. Often, the type of annuity you choose depends on what stage of life you are in.
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How do I make a withdrawal from my annuity?
To make a withdrawal from your annuity, you must complete a withdrawal form. To obtain a withdrawal form, log in to your account online. Navigate to the "Forms Listing" page and select the appropriate form. If you have additional questions, please contact the Home Office at 800-552-0145.
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Can I withdraw funds from my annuity without penalty?
In order to avoid an IRS penalty, you must be 59 1/2 or older to withdraw funds. To avoid a surrender charge from COF, review your contract. All surrender charges are listed there.
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What is the difference between a qualified and non-qualified annuity?
A qualified annuity is when money is contributed pre-tax and has certain tax benefits. Please contact your tax adviser with additional questions.
A non-qualified annuity has two pieces of money: money you paid into the policy post-tax that will never be taxed, and an income portion deferred until a withdrawal is made.
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What is an RMD, and when am I required to start taking it?
RMD stands for Required Minimum Distribution. It is a portion of your IRA to be withdrawn when you reach age 70½. The IRS mandates this withdrawal on most qualified annuities. The beginning date for your first RMD is April 1 of the year following the calendar year in which you reach age 70½. For each year following this initial year, the IRS mandates that you must withdraw your RMD by December 31.
