Financial

Annuities
With so many retirement savings options, it may be challenging to decide which plan is right for you. Erie Family Life’s annuities can help boost your retirement savings today and secure your financial freedom later.*

Why Annuities?
Fixed rate annuities are a good investment if you:

  • Need another source of retirement income
  • Want tax-deferred growth on your investment
  • Want an investment with guaranteed interest rates
  • Want to receive guaranteed income for a fixed period or income for life
  • An annuity is the only financial instrument that offers a guaranteed income stream that you cannot outlive. With fixed-rate annuities, you can save for retirement and avoid the risk of losing wealth due to volatility in the stock market.

Why Should You Consider an Annuity from Erie Family Life?
Annuities from Erie Family Life offer you:

  • Business retirement plans such as Simple IRAs or Simplified Employee Pension (SEP) IRAs
  • Personal retirement plans such as Roth and Traditional IRAs
  • Interest-only options
  • 10 percent free withdrawal each year
  • Immediate investment earnings without a policy fee or sales charge
  • Options to roll over qualified funds from an employer’s retirement plan, such as a 401(k), when changing jobs

Portfolio Plans
Erie Family Life’s annuity portfolio includes these plans:

  • Flexible Premium Deferred Annuity (FPDA) – Savings from an FPDA can be used as a source of retirement income or to supplement the amount you’re putting into an employer-sponsored plan. You can make scheduled or intermittent payments into a retirement savings plan, such as a Traditional or Roth IRA, and the income will be available when you need it. You can start with as little as a $300 investment.
  • Single Premium Deferred Annuity (SPDA) – If you have $10,000 or more to invest, a Single Premium Deferred Annuity is an excellent choice. You may choose a guaranteed period of 3, 5 or 7 years. Depending on the amount of your deposit, first year bonus rates are available.
  • Single Premium Immediate Annuity (SPIA) – The SPIA is a good choice for someone who desires an immediate source of income. You chose the payment stream that’s right for you — whether it’s payments for a set number of years or the rest of your life.

Erie Family Life offers different rates and returns on annuity investments. Contact our agency for more information.

* Erie Family Life products are not available in New York.


Traditional and Roth IRAs
You want your golden years to be comfortable. We know that even with a pension benefit and Social Security, your savings might need a boost.

That’s why Erie Family Life offers a Traditional IRA and a Roth IRA.* Because they’re funded with a fixed rate annuity, you can be assured that, between now and then, your money will grow.

Erie Family Life’s rates respond to market conditions, but never go below a designated minimum. Guaranteed.

Here’s how these qualified retirement plans look side by side:

  Traditional IRA Roth IRA

How the plan works
– Contributions are generally tax-deductible.
– Earnings are tax deferred until they are withdrawn.
– Contributions are not tax-deductible.
– Qualified withdrawals are generally tax-free.

Who’s eligible?
– Individuals under 70 ½.
– Individuals or married couples having at least one spouse with earned income.
– There is no age limitation.
– Individuals or married couples having at least one spouse with earned income.

Distributions
– Withdrawals prior to age 59 ½ may be subject to a 10 percent premature distribution penalty in addition to regular income tax.
– Mandatory withdrawals must be made at age 70 ½.
– Withdrawals prior to age 59 ½ and/or after 5 years may be subject to both income tax and penalties.
– No mandatory withdrawals required.

Get a financial insurance quote or contact our agency for more information about ERIE’s auto insurance options.
Exceptions to 10 percent early distribution penalty

Death or disability of IRA participant; qualifying higher education expenses; first-time homebuyers. (Consult your tax advisor for more information about these exceptions.)

Need help choosing a plan? Contact our agency. We can explain each plan in greater detail.

*Erie Family Life products are not available in New York.


Savings Incentive Match Plan for Employees (SIMPLE) IRA
The Savings Incentive Match Plan for Employees (SIMPLE) IRA is a tax-qualified retirement plan for businesses (C Corps, S Corps, Partnerships and Sole Proprietorships) with fewer than 100 employees. It enables eligible firms to offer 401k-type benefits without complicated rules or high administrative expenses. It enables eligible employees to make tax-deductible contributions beyond what a traditional IRA allows.*

For businesses, SIMPLE means:

  • No top-heavy rules.
  • No Form 5500 filings each year.
  • Fully deductible contributions (subject to certain limits).

For individuals, SIMPLE means:

  • Contribution limits far above what a Traditional IRA allows.
  • Complete investment control.
  • Some level of employer contributions.
  • Full and immediate vesting of employer contributions.

Required employer contributions can be made on either a 3 percent “elective” basis or a 2 percent “non-elective” basis.

Under the elective method, the employer is required to contribute only if an employee “elects” to contribute. Under the non-elective method, the employer contributes a flat percentage of compensation (2 percent minimum) for everyone regardless of any personal participation.

SIMPLE contribution limits for individuals are listed below. One hundred percent of earned income can be contributed. All contributions must be made through salary withholding.

Year Under Age 50 Over Age 50 – Catch-up Contribution
2012
$11,500
$2,500
2013
Indexed
Indexed

Simplified Employee Pension (SEP) IRA
A Simplified Employee Pension (SEP) IRA is a retirement plan that’s easy to set up and easy to administer. There’s minimal paperwork and no annual reports to the IRS. There are generous funding limits, and contributions are fully tax-deductible.*

Because of the plan’s simplicity, affordability and flexibility (contributions can be stopped or started at any time), the SEP is great for small businesses, professionals and self-employed people. Of course, certain rules do apply:

  1. Employees cannot contribute personally. Only employer contributions are permitted. If employee participation is important, consider the SIMPLE-IRA instead of the SEP-IRA.
  2. SEP plans cannot discriminate. Employees must receive equal percentage contributions.
  3. A SEP plan must cover anyone:
    • who is 21 years old
    • who has worked for the employer for at least three of the past five years
    • who has earned at least $550 for the year. (A plan may be less restrictive, but it cannot be more restrictive. All contributions are immediately and 100 percent vested.)
  4. Contributions in 2012 may not exceed 25 percent of compensation or $50,000, whichever is less. Self-employed individuals may not contribute more than 20 percent of compensation or $50,000, whichever is less.

Get a financial insurance quote or contact our agency for more information about ERIE’s auto insurance options.

For more information about starting SEP or funding an SEP-IRA, contact us.

*Erie Family Life products are not available in New York.