Most deferred annuities impose a surrender period — commonly 5 to 10 years — during which withdrawals above the annual free-withdrawal allowance (typically 10%) trigger surrender charges. Withdrawals before age 59½ may also incur a 10% federal tax penalty on the taxable portion, in addition to ordinary income tax on gains. Access to large sums early in the contract can be expensive; annuities are designed for money you can afford to set aside for the long term.