: If you choose to withdraw money instead of borrowing it, you might be hit with heavy surrender charges (sometimes as high as 7–20% ) if you haven't held the contract long enough. Exceptions for First-Time Homebuyers
: Like any loan, you must pay back the principal plus interest. You may also face administrative fees from the provider. Risks and Consequences can i borrow from my annuity to buy a house
The IRS may waive the 10% early withdrawal penalty for first-time homebuyers (up to a ). However, you will still owe regular income tax on the amount withdrawn. : If you choose to withdraw money instead
: While your money is "borrowed," it isn't earning the interest or market returns it would have otherwise, which can shrink your retirement nest egg. Risks and Consequences The IRS may waive the
: If your provider doesn’t offer direct loans, you might be able to use the annuity as collateral for a loan from a bank or third-party lender.
: If you fail to repay the loan on time, the IRS may reclassify it as a "deemed distribution." This means the balance becomes taxable as ordinary income.
