Investments - Traditional IRA
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It's easy to find yourself daydreaming about the fun and exciting things you'll do when you retire. Turning those daydreams into reality requires discipline and sound retirement planning. The sooner you get started, the better your chances of success, Your retirement years can be the best years of your life, Why not let Erie Family Life help make your dreams come true'?

What is a Traditional Individual Retirement Annuity (IRA)?

A Traditional IRA is designed to help you accumulate money for the future, especially for retirement. It can save you from relying on Social Security, or an employer's retirement plan as your only source of retirement income. Usually, the money you invest in a Traditional IRA is deductible for federal income tax purposes, and interest earnings accumulate tax-deferred,

Who is eligible for a Traditional IRA?

If you have earned income and it does not exceed certain limits, you, and perhaps your spouse, are eligible for a Traditional IRA. (See Traditional IRA insert, form EFL-759a,)

Can I have a Traditional IRA and a ROTH IRA?

Yes you can, However, you cannot contribute more than the allowable amount into either type of IRA or a combination of the two,

What about making premium payments?

Erie Family Life is flexible, You may wish to make regular payments, such as monthly or quarterly, or you may choose to make a single payment one time per year, Keep in mind that you must make your payment(s) between January 1 of the current tax year and the date your federal income tax return is due (usually April 15 of the following year).

How are distributions taxed?

Since payments to a Traditional IRA are deducted for tax purposes, benefit payments, including interest earnings, are subject to ordinary income tax. Furthermore, if the taxpayer is less than age 59 % at the time of distribution, a 10% federal tax penalty applies, unless: the payment is made because of death or disability; the proceeds are used to pay medical expenses in excess of 7.5% of Adjusted Gross Income; the distribution is paid over the life of the participant or the joint lives of the participant and their designated beneficiary; the funds are used by an unemployed person to pay health insurance premiums; the proceeds are used by a first-time home buyer to purchase their principle residence; or, used to pay qualified higher education expenses. Specific IRS rules affect the applicability of the exceptions to the 10% penalty tax. Consult your tax advisor for complete details.

How long does the income benefit last?

That is up to you. Your Erie Family Life Agent can review some of the more popular benefit options available with ERIE's Traditional IRA.

What makes an Erie Family Life Traditional IRA so attractive?

The rate of interest credited to Erie Family Life's annuities is very competitive. Proceeds paid to a named person because of the annuitant's death are not subject to probate and need not go through a court.

An optional Waiver of Premium Benefit provides for the continuation of premium payments if the policy owner becomes permanently disabled, as provided for in the contract.

There are no annual fees, and the surrender charge period for partial withdrawal or total policy surrender is among the shortest in the industry. The surrender charge is calculated as a percentage of the account value and lasts only five years, according to the following schedule:

• Policy year 1 = 8%
• Policy year 2 = 5%
• Policy year 3 = 3%
• Policy year 4 = 2%
• Policy year 5 = 1%

A 10% free withdrawal feature allows one withdrawal ot up to 10% of the account value each policy year without incurring any surrender charge.

A complete waiver of surrender charge applies if the annuitant is retired and purchased the annuity before age 60, or has held the annuity for at least three years.

Is the Traditional IRA guaranteed?

Yes! All premium payments and accrued interest earnings are guaranteed by Erie Family Life Insurance Company.

Erie Family Life's Traditional IRA offers these valuable and important features:

• Guaranteed savings
• Flexibility
• Stability
• Tax-deferred earnings
• Personal service