Can I Withdraw Money from My Secondary Market Annuity?

Written by Hersh Stern Updated Friday, January 1, 2021

Without question, the number one benefit of a secondary market annuity is its ability to provide a yield greater than what is currently offered by insurance carriers. The tradeoff is that you give up control over the premium paid to acquire the SMA.

So while receiving a higher-yielding income stream or lump sum is a great comfort to have, the fact that a secondary market annuity is mostly illiquid can feel quite restrictive to someone shopping for this type of product.

If you're wondering, “Can I tap into my SMA if something unexpected happens and I need extra cash?” -- The answer is – usually not. Many SMAs offer zero liquidity and no ability to re-sell your income stream. You must simply accept the payment stream under the terms of the original contract.

However, there are some SMAs that will allow you to re-sell your income stream. Keep in mind that you will only receive whatever the market will bear at that time, and this could be a discounted lump sum. Be sure to consult your advisor to see whether or not your SMA can be re-sold.

Testimonial Image
I was hesitant at first to buy an annuity on the internet. Once I got your quote report and read your reviews I was happy I found your website. Your phone reps were always very helpful. You made the whole thing go really simple. Thank you guys!
Joe Murphy
Read 650+ verified reviews

If you prefer a product that offers more liquidity, there are a variety of options for you. For starters, many immediate annuities now have liquidity features built-in which will allow you to withdraw lump sums of money if necessary.

For even greater liquidity, you might consider a deferrred annuity or a fixed index annuity. While these annuity types generally charge surrender fees for early withdrawals, you will still be able to access most of your principal, even in the early years of your annuity.

We'd love to hear from you!

Please post your comment or question. It's completely safe – we never publish your email address.

Add a new comment:(Allowed tags: <b><i><br>)

Comments (0)