In IRS Notice 2004-15, issued on March 1, 2004, the IRS said that annuitants age 59 1/2 or younger who are receiving annuity payments - a regular stream of income -- from a non-qualified annuity can revisit their annuity company to restructure their payment plans. In effect, the IRS guidance allows these annuitants to restructure their payment schedules to take advantage of changing market conditions.

Prior to Notice 2004-15, these annuitants had only one opportunity to establish their payment schedule, based on their expected mortality and the accumulated amount in the contract. Depending on their age, they could face a 10 percent federal income tax penalty for "early withdrawals" if they restructured their arrangements.

But now, for example, a person who began taking payments from his or her annuity when the market was at its peak in 2000 may take advantage of this guidance. By restructuring the contract based on current values, the annuitant can make sure that the account lasts longer.