I'd like to transfer funds from a nonqualified annuity, but I am not 65. I am a student and would like to use the money for tuition. Will I be exempt from the 10 percent penalty?
The age for the penalty for early withdrawal of a nonqualifying annuity is 59 ½, the same as retirement accounts. The penalty is only on the earnings from the nonqualifying annuity. Please be aware of any service charges that may apply when making a withdrawal within the first five to seven years. They can be very expensive.
I did not find any exceptions to rolling the money over, except for in cases of permanent and total disability.
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Answered by: Scott Rubinsky, CPA, is a sole practitioner in Huntingdon Valley, Pa.