A tax-sheltered annuity (TSA) is an employer-sponsored retirement savings plan also called a 403b plan. While these plans are designed to supplement retirement income after age 59 1/2, it is possible to access 100 percent of the money in the account less fees and taxes at any time. Since the money put in is pretax money, the Internal Revenue Service will take taxes out when it is distributed. The tax penalty for surrendering the money before age 59 1/2 was 10 percent as of 2010.
Instructions
1. Call the TSA administrator at the number located on the plan statement. Ask if there are any surrender charges or penalties for liquidating the annuity. Some TSAs use deferred annuities as the investment basis, requiring owners to hold the annuity for a minimum number of years, called a surrender period. Taking money out before the expiration of the surrender period requires a fee, called a surrender charge paid on distributions.
2. Request a surrender form from the TSA administrator.
3. Complete the form, making sure your name, address and Social Security number is correct. Write in 100 percent liquidation or surrender on the "distribution amount" line. Complete the tax withholding section to determine tax withholding.
4. Submit the form and wait for a check to arrive. It takes a week to 10 days to receive the surrender value check.
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