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If you take out of the annuity you will pay tax on the amount that represents earnings. The portion that is your investment is not taxed but the annuity splits a portion fo the distribution between taxable and return of investment.
Your savings are not taxable when you take them out (you already pay tax each year on any interest you earn).
Your choice depends on if you want to pay tax on the distribution.
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If you take money out of an annuity, you pay tax on the amount that represents the earnings. If you take out at 59 1/2 or older you still pay income tax on the earnings. The only difference in being 59 1/2 is that you do not pay the additional penalty for an early withdrawal.