When Can You Withdraw From Annuities? 
You can generally withdraw money from an annuity at any time . However , you may be subject to a penalty and taxes . Annuities are generally meant to be long-term or at least a specified term such as 5 , 7 , 10 or more years . Each contact will have rules on how much you can take out annually without any penalty . Often it is 10 percent per year , after the first year . If you withdraw above the penalty-free withdrawal amount , you will pay a penalty . This annuity schedule is part of the contract and if you have questions about how to interpret , contact the agent that sold you the annuity or another qualified agent . Taxes will likely apply to any withdrawals at your ordinary income tax rate for that year . Also remember that if your annuity is a non-qualified account -LRB- not a Roth or IRA -RRB- and you withdraw prior to age 59 1/2 , the first dollars you withdraw will be considered your gain and be taxed at whatever your ordinary tax rate is for that year . There are ways to avoid the penalty -LRB- not the tax -RRB- for the withdrawal under section 72 -LRB- t -RRB- of the IRS code but you would have to agree to take level distributions until age 59 1/2 or for 5 years , whichever is longer . If you do n't follow this rule , you will be subject to a 10 % penalty going back to when you started early withdrawals from your annuity . Annuities can be a great product when the `` fit '' is correct . Your agent should make sure it is suitable upfront for your specific needs so you can avoid getting into an early withdrawal situation . 