After all, this may have been your main objective when you established the annuity many years ago. If additional income is not needed, then your annuity will continue to grow tax deferred until some time in the future when you need extra income. If you don't own an annuity, consider one if you are looking to defer taxes or generate a stream of income from existing assets. Lump sum distributions are the least common, because when you take a lump sum you are taxed all at once, rather than a little at a time. Also, a lump sum distribution could push you into a higher tax bracket, increasing your tax liability even more.
Withdrawals are more common.
They allow you to have more control over your dollars. If you do not need additional income at the time, you can keep your dollars in the annuity and continue with the tax deferral on the earnings. Typically if you take withdrawals, tax deferred earnings are distributed first and will be taxable to you as income. Also, if you take withdrawals, there is no guaranty how long your annuity asset will last. This is called annuitizing.