Free Withdrawal Provisions: The Hidden Liquidity Feature Most People Miss

Every annuity has a surrender charge schedule. But most also have a free withdrawal provision that lets you access 10% of your value each year without penalty. How it works: - Most FIAs and MYGAs allow 10% free withdrawal annually after year 1 - Some products offer cumulative free withdrawal (if you don't use it, it rolls over) - Nursing home and terminal illness waivers may provide full liquidity Why this matters for retirement planning: A $500K MYGA with 10% free withdrawal means $50K/year of accessible cash — that's $4,167/month of potential income without touching the surrender charge. What to look for: - Does the 10% apply to purchase price or current value? - Is it cumulative or use-it-or-lose-it? - Are there RMD-friendly provisions? - What are the waiver triggers? Always check the free withdrawal percentage in the product spec before recommending. It varies more than you'd think.