There isn't much you can do. The distribution from the annuity will include amounts treated as a recovery of your cost (investment in the contract). That part is tax free. The first step in figuring how much of the distribution is taxable is to determine the cost of your pension or annuity. In general, the cost is the net investment in the contract as of the annuity starting date. The issuer of the annuity should be able to provide you with this information.
If you are still working, you can contribute to a Traditional IRA. If you have a HDHP, you can contribute to an HSA.
