It's the most important annuity feature to understand — and one of the simplest. Here's exactly how surrender charges work, and how a little planning makes them entirely avoidable.
A surrender charge is probably the single most important annuity feature to understand before you buy. The good news: it's straightforward, and it's entirely avoidable with a little planning. In short, it's a fee for taking out more than your allowed amount before your contract's term is up.
Here's the key thing most people don't realize: a surrender charge declines every year until it disappears completely at the end of the term. A typical schedule on a 7-year annuity might look something like this:
By the time your term ends, the surrender charge is gone entirely — you have full access to your money with no penalty. This is exactly why matching the term to your timeline matters so much.
You're rarely locked away from all your money. Most contracts include built-in flexibility:
A surrender charge is only a problem if you're surprised by it. Here's how to make sure it never affects you:
Surrender period ending soon? That's your window of maximum flexibility. The Annuity Maturity walks through your four options and the 90-day timeline that makes the most of it.
No pressure, no obligation. Explore the rate tool, take the 2-minute quiz, or ask Devin anything — whatever helps you understand your options.