How Much Should You Invest In Annuities? 
One key factor when determining how much to invest in an annuity is liquidity . Most annuities come with a contingent deferred sales charge -LRB- CDSC -RRB- . Usually you can withdraw 10 % of your account value per year before triggering the CDSC . However if you wind up having to withdraw more than that amount in the first 5 to 8 years of the contract you could pay a hefty fee . Additionally any deferred earnings taken out prior to age 59 1/2 will come with a 10 % income tax penalty . For these reasons you should have an adequate emergency savings fund before investing in an annuity . You should also limit your annuity investment to funds that you will not need until you are over the age of 59 1/2 . 