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Is it ok for a retired person to use annuity to repay debts?

Date: Thu, 05/30/2019 - 23:51

Submitted by KeithRonald
on Thu, 05/30/2019 - 23:51

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Total Replies: 4

Is it ok for a retired person to use annuity to repay debts?


One of my uncles is using his annuity to pay back some of his debts since he has retired and doesn't have much income. But, I want to know, is it ok to do it?


I won't recommend that. I would suggest you to get part-time job instead.

Money withdrawn from an annuity is taxed just like a normal income. Plus, the insurer who holds your annuity may charge a withdrawal fee, and that can be as high as 7%. So you have to pay a significant amount.


lrhall41

Submitted by Nick Jonas on Mon, 06/03/2019 - 00:39

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I would agree with Nick. Money taken from annuity can be taxable as a normal income.
The insurance company may also charge you a withdrawal fee as much as 7%. So, the costs will be higher.


lrhall41

Submitted by tiarajoseph11 on Tue, 06/11/2019 - 02:58

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