---
title: "What Is Free Withdrawal? Definition | Epic Life Glossary"
description: "A free withdrawal is a portion of an annuity that the owner can take out each year without paying a surrender charge. The allowed amount is stated in..."
url: https://epicline.preview.multisites.ai/glossary/free-withdrawal
publisher: Epic Life Group
apply: https://epicline.preview.multisites.ai/apply
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---

Annuity terms

# Free Withdrawal

A free withdrawal is a portion of an annuity that the owner can take out each year without paying a surrender charge. The allowed amount is stated in the contract, often a percentage of the account value.

## Why it matters

Free withdrawal provisions give some access to money during the surrender period. A common amount is up to 10 percent of the value per year, but this varies by carrier and contract. Income taxes can still apply to the earnings withdrawn, and a 10 percent federal penalty may apply before age 59 and a half. A market value adjustment may apply to amounts above the free limit. Read the contract to see how and when the free amount resets.

Source: [investor.gov](https://www.investor.gov/introduction-investing/investing-basics/glossary/annuity)

[Read next, for familiesAnnuities explained: fixed, fixed-index, MYGA, income riders and surrender charges](https://epicline.preview.multisites.ai/annuities)

## Where we use this term

-   [Fixed vs fixed index annuity: how do they work and who do they fit?](https://epicline.preview.multisites.ai/guides/fixed-vs-fixed-index-annuity)

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