One negative aspect of an annuity is that you cannot get to your money during the growth period without incurring taxes and penalties. The tax code imposes a 10% premature withdrawal penalty on money taken out of a tax-deferred annuity before age 59-1/2, and insurers impose penalties on withdrawals made before the term of the annuity is up. The insurers' penalties are termed "surrender charges," and they usually apply for the first seven years of the annuity contract.

The annuity, in essence, is insurance against "living too long." In contrast, traditional life insurance guards against "dying too soon." Here is a summary of how annuities function. An investor hands over funds to an insurance company. The insurer invests the funds. At the end of the annuity's term, the insurer pays the investor his or her investment plus the earnings.

Variable annuities are sold by prospectus only. Your Smith Barney Financial Advisor can provide you with the prospectuses for the products in which you are interested. Investors should consider the objectives, risks, charges and expenses of the investment company. The prospectus contains this and other information. Please read the prospectus carefully before investing.

ShareBuilder lets you personally select the dollar amount you want to invest in over 6,000 stocks. Back to top Simple. Open a new ShareBuilder Individual, Joint or Custodial account by January 15th, 2007 and, through this limited time offer, we will contribute $50 to your account after the first transaction has occurred. It’s our way of saying “thank you” and, to the great kids in your life, both “happy holidays” and “have a great future.

If you qualify, you can contribute up to a maximum of $4,000 a year out of your earnings ($8,000 for married couples). Tax payers age 50 and over may contribute an additional $1000. You cannot deduct the money from your income as you do with a traditional IRA. You fund this plan with your after-tax dollars. You cannot contribute more than you (and your spouse) have earned.