Retirement Withdrawals

The money you have in a deferredannuity is subject to many of the samerules as assets in your IRA. If you tapinto the nest egg before age 591/2, youget hit with a 10% tax penalty. Therehave always been exceptions to thisrule, and one of them involves regular,periodic withdrawals that last for 5years or until you reach age 591/2,whichever comes later. The catch is thatyou have to take out the same amountevery year and specify that amount atthe start. Until last year, when the IRSeased up on the rules for periodic withdrawalsfrom IRAs, you couldn'tchange that amount. Because manyinvestors who were taking systematicwithdrawals found that the sinkingmarket was depleting their stash toorapidly, the IRS changed the rules toallow a one-time adjustment in thewithdrawal rate from an IRA. New IRSrules that went into effect in March ofthis year do the same for annuities.