Skip to main content
No. of Recommendations: 0
I have a variable annuity with Van Guard. I would
like to withdraw money from it and contribute to
my wife's IRA and mine also.

I assume that the VA at Vanguard is an unqualified annuity (not in any retirement account). In that case, if you withdraw everything from the VA, everything in excess of the premiums will be taxed at ordinary income tax rates and, since you are not yet 59.5 years old, 10% federal penalty (plus any state income tax and penalty). If you don't withdraw everything, the ordering rules are such that the first monies out are earnings.

If I recall correctly, Vanguard doesn't have any surrender charges.

Generally, you would be better off finding new monies to fund the IRAs.

The the VA is in a qualified account like a 401(k), 403(b), Traditional IRA, Roth IRA, or the like, then you have to follow the rules of that type of account. Usually, though, the Vanguard representatives will advise against placing a VA inside any tax-favored account.
Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.