Most annuities, both fixed and variable, impose a surrender charge if you withdraw money before a certain amount of time. This period ranges from one to 10 years; six or seven is common. The charge applies to the amount you withdraw and declines over time. For example, you might owe 7 percent of the amount withdrawn in the first year after a purchase payment, 6 percent in the second year, 5 percent in the third year and so on until the charge reaches zero in the eighth year. This fee usually goes to the person who sold you the annuity.

Some annuity contracts will let you withdraw a certain amount each year without a surrender charge. Some will also waive the surrender charge if you need to take out money for certain hardships. For more see, http://www.sec.gov/investor/pubs/varannty.htm#vch.