Internal Revenue Service rules require that you take at least one payment annually for the exception to apply. He decides to take the money out. This limits the ability for that money to grow. You have to swallow hard when you go into one of these things.
Marriage makes a difference Of course, there's an exception to that rule, too.
Hinkle says there are circumstances where it might make sense to take such an annuity distribution on a retirement plan. That's more conceivable. If it's a one-life and the person is 55 years old, according to the actuarial table that person will live an additional 28.6 years. If it's a two-life, based on the life expectancy of both spouses, the table says both will have died within 34.4 years. They include disability, buying a home for the first time and paying medical expenses that are more than 7.5 percent of your adjusted gross income.