Q: I invested in a variable annuity when I was 39. Now that I'm 52, I want to begin withdrawals to help pay my daughter's college expenses. Will I have to pay an early withdrawal penalty? D.T., Raleigh, N.C.
A: Not if you make the proper planning move. As with retirement accounts, distributions from a tax-sheltered annuity are usually subject to a 10 percent penalty tax if they're made prior to age 59 1/2, unless a special exception applies. With an IRA, a special exception exists for distributions made to pay qualified education expenses. But this exception doesn't apply to early withdrawals from an annuity. But here's an exception you can use: Payments that are "substantially equal periodic payments" are free of the 10 percent penalty. That means you could arrange to take penalty-free annuity-like payments from your variable annuity. Check with your annuity company about this option.