Surrender Charge Calculator
See the real cost of withdrawing from a fixed annuity before the surrender period ends — including MVA, free-withdrawal allowance, and surrender charges.
What this is
A rough estimator of what you'd actually receive if you withdrew money from a fixed annuity before the surrender period ends. Real numbers depend on your contract — exact surrender percentages, free-withdrawal terms, and MVA formulas vary by carrier. Use this for a ballpark; verify with your specific contract before acting.
Estimate your withdrawal cost
How this is calculated
1. Free withdrawal
Most fixed annuities let you withdraw up to 10% of contract value per year without surrender charges, starting in year 2. Some carriers give you the 10% in year 1 too, others don't allow any withdrawal in year 1. This calculator assumes 10% available in year 2+ and 0% in year 1.
2. Surrender schedule
The surrender charge percentage decreases each year of the contract. The defaults in this calculator reflect typical industry schedules:
- 5-year fixed annuity: 8% / 7% / 6% / 5% / 4% (years 1 through 5)
- 7-year fixed annuity: 7% / 7% / 6% / 5% / 4% / 3% / 2%
- 9-year fixed annuity: 9% / 9% / 8% / 7% / 6% / 5% / 4% / 3% / 2%
- 10-year fixed annuity: 10% / 10% / 9% / 8% / 7% / 6% / 5% / 4% / 3% / 2%
Your specific carrier may have a slightly different schedule. The contract document is the source of truth.
3. Market Value Adjustment (MVA)
When you withdraw above the free amount, many fixed annuities apply an MVA on top of the surrender charge. The math:
The formula
MVA ≈ (current_rate − contract_rate) × years_remaining × excess_amount
If current rates > your contract rate, MVA is negative — you receive less. If current rates < your contract rate, MVA is positive — you receive more. This calculator shows a simplified estimate; real MVA formulas are carrier-specific and can include additional factors like a rate spread.
4. What the calculator can't tell you
- Tax impact — withdrawing the gain portion triggers ordinary income tax (LIFO accounting), plus a 10% additional tax if you're under 59½.
- Lost future interest — money you withdraw stops compounding tax-deferred.
- Carrier-specific rules — some fixed annuities waive surrender charges in special cases (terminal illness, nursing home admission, RMD amounts).
Before you act
Get an actual quote from the carrier (or your agent). Most carriers will provide a free "surrender illustration" showing the exact dollar impact of the withdrawal you're considering. The numbers above are estimates designed to help you decide whether to ask for that illustration.
When to consider an early withdrawal anyway
- You qualify for a surrender-charge waiver (terminal illness, long-term care, death of owner — varies by contract)
- You're taking only your free-withdrawal amount — no surrender, no MVA
- You're past the surrender period — full account value with no penalty
- You're replacing the contract with a higher rate — surrender still applies, but the rate uplift on a new product can sometimes pay it back. Compare live rates.
Get your personalized savings plan
Answer four quick questions — no email, no phone, no pressure — and we’ll build a plan from today’s real CD and fixed-annuity rates: which to use, the exact rates, and where every dollar stays protected.
Get your plan →