Most annuities allow withdrawals at least once a year (usually up to 10% of the accumulated value in your annuity) without a company charge.

Another way to receive income from your annuity is through systematic withdrawals. A Systematic Withdrawal program allows you to enjoy a steady stream of income on a monthly, quarterly, semi annual or annual basis. Unlike annuitization, which is a permanent decision, systematic withdrawals allow you to start and/or stop your income payments as your needs dictate. You can have the amount of your payments increased or decreased - it's up to you. Systematic withdrawals give you added flexibility without giving up control of your money or your taxes. Systematic withdrawals tax your earnings first. So then all earnings have been exhausted, tax-free return of principal remains.

Ultimately, you can cancel your annuity altogether if you need access to your money. Insurance companies call this "surrendering your contract." If you surrender your annuity in the first few years, the insurance company will probably deduct a surrender charge. Surrender charges vary from plan to plan, but typically start at about 8% in the first year and decline by 1% each year thereafter until they completely disappear. If you surrender a contract (or make partial withdrawals) and you are under the age of 59½ you may be subject to a 10% federal tax penalty. For most people, this isn't a problem because the money they have in their annuities for long-term use, or earmarked for retirement.