How long does it take to receive money from my annuity?
When you buy an annuity, you are essentially making a contract with an insurance company to provide you with a series of payments at fixed intervals. The length of time it will take for you to receive payments from your annuity will depend on a few factors, including the type of annuity you purchase and the age of the person buying it. Most people receive payments from their annuities within a few years of purchase. However, it is important to consult with an insurance agent to get a more details.
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UPDATED: Apr 3, 2022
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The time it takes to receive money from an annuity often depends on the company you are dealing with. The standard amount of time for this type of transaction is about 3 business days following your request.
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You can then receive the money the day after the transaction, through a money wire service or overnight delivery services, for an added fee. Alternatively, you can also opt for electronic funds transfer which typically takes 48 hours. Or you can wait for the regular postal service to deliver your check.
Annuities are notoriously known as not being a very liquid form of investment. This means that getting your money out is not as quick as many people would like; and the annuity fees associated with such a withdrawal are very high.
In the first year of an annuity, fees can reach as high as 10% for withdrawal. Therefore, you may want to consider alternate ways to get your money back or think more carefully before making such an investment at all.
Getting Your Money Back by Selling Your Annuity
An alternative to paying the large fees associated with withdrawing your investment is to sell your annuity. Usually you can get a better return on the secondary market for your annuity than you would get by surrendering your annuity to the investor and dealing with all the penalty fees. Be sure to deal with reputable companies and do your homework before going this route, so that you get the maximum for your investment and do not get scammed.
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Things to Consider Before Deciding To Buy an Annuity
Before you decide to take out an annuity, you need to carefully analyze whether or not an annuity is actually the best investment for you. On the surface, a guaranteed rate of return, tax breaks and guaranteed income in the future sound like a very good choice. However, if there is a reasonable possibility that you will need the money you are investing for another purpose, you may want to consider delaying or changing your mind about an annuity purchase.
- If you have a child you are planning to put through college and that fund is not established, you should be sure to take care of that before purchasing an annuity.
- If your home or vehicle is heavily financed, pay them down considerably prior to investing in an annuity.
- If your family does not have an emergency savings fund, it would be responsible to establish one that covers at least 6 months of expenses, before you take out an annuity.
- If you do not have disability insurance, you may want to consider investing in one prior to taking out an annuity. Statistics say that 3 out of every 10 employees will become disabled prior to retirement. As much as 70% of the workforce in the private sector has no type of long-term disability benefits. Therefore, the risk is fairly high that you might need income to cover the cost of living due to a disability before your annuity reaches its term.
Buying an Annuity
If you have decided to buy an annuity, you need to take the time to learn about the different options available to you, like: variable annuities, indexed annuities, fixed income annuities, guaranteed income annuities, fixed equity indexed annuities and more. Choosing the right one can make a big difference to your financial future.
Once you have settled on the type of annuity you want, you will need to get quotes from a variety of annuity companies. There are big differences between the many different companies that offer annuities in the United States. Rates of return can be very diverse. Any annuity owner should understand that fees can vary greatly. Even the stability of the companies themselves can be very different. A retirement savings plan is a serious matter, that you’ll want to be assured will suit your needs. Check with an insurance agency or a financial advisor to determine what annuity type might be best for your situation.
Using a free online annuity quote tool is a quick and easy way to get a variety of quotes on the type of annuity you are looking for. You simply answer a set of standard questions and your information is submitted to a variety of annuity companies. In no time you will have multiple annuity quotes to choose from.
Compare the quotes you receive carefully for cost and rate of return. Ask about any other fees, surrender charges, or any possible withdrawal penalties for initiating an early withdrawal process. Then, look carefully at the insurer in question. Check out the stability of the company because annuities are such a long term investment. You want a company that is solid and will be around for a very long time. You can get such information through Weiss Ratings, A. M. Best or one of the other independent insurance rating companies.
Start shopping for annuities today, by letting the online annuities quotes tool do the time-consuming part for you now!