About Variable Annuities

Investors have a variety of ways to save for the future. Whether it's funding retirement or saving for big purchases in the long-term, choosing an investment depends on the length of the investment, budget and expectations of performance versus the risk involved. Variable annuities can be a good way to supplement other retirement plans and guarantee an income stream in retirement.

A variable annuity is a contract between the purchaser and an insurance company. In return for premium payments, the issuer agrees to make regular payments to the purchaser. Payments can begin immediately or at a future date.

- Much like a fixed annuity, contributions are made with after-tax dollars and are not tax-deductible. Most investors should fund other retirement plans first, but if you've already contributed the maximum allowable amount to those plans and want to save more, an annuity can be a good choice.

- The difference with a variable annuity is that the purchaser can designate how the premium dollars will be allocated among the investment choices (often called subaccounts.) Variable annuities don't offer any guarantees on the performance of subaccounts. While there is a greater potential for earnings growth, there is also greater risk. If subaccounts perform poorly, you may lose money, including principal. Consider a variable annuity only if you're willing to assume the risk inherent in investing.

- There are two phases of annuity: accumulation and distribution. During the accumulation phase you can pay premiums in one lump sum or a series of payments over time. During the distribution phase the investor can withdraw some or all of the money in a lump sum or can annuitize. Annuitization provides a guaranteed income stream for either a specified period or for life.

- Annuities are designed for long-term investing. Usually there is a penalty for early withdrawal, so be certain you won't need the investment until age 59 1/2.

With offices in New York and Savannah, Barbara Treadwell has more than 20 years of experience in the financial arena. A Certified Financial Planner, Treadwell embraces the LEAP Systems principals of coordinating and integrating assets for improved rates of return, tax savings and better protection against the eroders of wealth.

For more information, visit www.treadwellassociates.com or call (800) 695-6007.