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July 18, 2020
Question

I was told that I could take 10% out of my annuity without penalties. It was at full term. Why am I paying a penalty?

  • July 18, 2020
  • 1 reply
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1 reply

Critter-3
July 18, 2020

Ok ... you misunderstood the annuity administrator ... you were allowed to take  out 10% from the annuity without a penalty from the annuity for an early distribution   but    NOT from the IRS.  If you have a code 1 in box 7 of the form 1099-R then you will be assessed the 10% early withdrawal penalty on your income tax return.