Auto-Owners Insurance

Annuities

Non-qualified deferred annuities are one of the best ways individuals have to set aside money on a tax-deferred basis.

IRAs are government approved qualified programs to help people plan and save for their retirement years. Many individuals have the option of choosing to invest in a "Traditional" IRA and the "Roth" IRA. Auto-Owners uses deferred annuities to fund either of these tax advantaged plans.

Auto-Owners Life Insurance Company has several annuity plans available. Click one of the links below to find out more.

Non-Qualified Deferred Annuities

What Are Non-Qualified Deferred Annuities?

Non-qualified deferred annuities are one of the best ways individuals have to set aside money on a tax-deferred basis.

A non-qualified deferred annuity is one which is not used as part of any qualified retirement plan, i.e. Traditional IRA or Roth IRA. Contributions made into a non-qualified deferred annuity are not income tax deductible. However, the amount contributed is not limited to a certain dollar maximum every year, and the earnings of the deferred annuity accumulate on a tax deferred basis.

A unique feature of an annuity, not found in any other investment vehicle, is that it can provide a stream of income that cannot be outlived. If the annuity benefits are to be paid over a lifetime, the monthly or annual benefit amount is guaranteed to come each and every month or year regardless of how long the individual lives. Several other payment options are also available. In the event of death, all proceeds can pass directly to a named beneficiary, without surrender charge, probate delay, estate settlement costs, or publicity.

Advantages of an Auto-Owners Life Insurance Company Non-Qualified Deferred Annuity

• Safety - Auto-Owners Life Insurance Company has been awarded an A.M. Best rating of A+ (Superior). A.M. Best Company is a leading independent organization for rating financial strength of insurance companies. In addition, Auto-Owners Insurance Company has been named to the 2004 Ward's 50 Benchmark Group for achieving outstanding financial results in the areas of safety, consistency, and performance.
• No set up or annual administration fees.
• Single or multiple deposits for varying amounts can be made at any time.
• You have a choice of current guaranteed interest rates for three or six years, or a fluctuating rate of interest program. Each program includes a minimum 3%guaranteed rate of interest.

Auto-Owners Life Insurance Company deferred annuity products may have restrictions or limitations. They contain surrender charges on early withdrawls, and the IRS imposes a 10% penalty tax for most withdrawls before age 59-1/2.

Traditional IRA

A Traditional IRA is a personal retirement savings plan. Contributions may be tax deductible and interest earnings are tax deferred.

Can I have a Traditional IRA?

Anyone under the age of 70-1/2 with earned income can contribute up to the lesser of 100% of earned income or $4,000 per year. Taxpayers age 50 and over can make an additional annual "catch-up" contribution. The following tables outline contribution and deductibility rules for tax year 2007:

If you are covered by a retirement plan at work, and...

If your filing status is...	And your modified adjusted gross income (MAGI) is...	Then you can take...
single or head of household	$50,000 or less	a full deduction.
	more than $50,000 but less than $60,000	a partial deduction.
	$60,000 or more	no deduction.
married filing jointly or qualifying widow(er)	$75,000 or less	a full deduction.
	more than $75,000 but less than $85,000	a partial deduction.
	$85,000 or more	no deduction.
married filing separately	less than $10,000	a partial deduction.
	$10,000 or more	no deduction.

If you are not covered by a retirement plan at work, and...

If your filing status is...	And if your MAGI is...	Then you can take...
single, or head of household, or qualifying widow(er)	any amount	a full deduction.
married filing jointly or separately with a spouse who is not covered by a plan at work	any amount	a full deduction.
married filing jointly with a spouse who is covered by a plan at work	$150,000 or less	a full deduction.
	more than $150,000 but less than $160,000	a partial deduction.
	$160,000 or more	no deduction.
married filing separately with a spouse who is covered by a plan at work	less than $10,000	a partial deduction.
	$10,000 or more	no deduction.

When can I use my Traditional IRA

A Traditional IRA is intended for retirement savings.

Withdrawals can be made at any time; however, they are subject to tax in the year received. In addition, under current tax law, a 10% IRS penalty tax is assessed, in most cases, if under age 59-1/2.

Within specific guidelines, retirement benefits can begin prior to age 59-1/2 without incurring an IRS penalty tax.

Required Minimum Distributions (RMD) must begin by April 1 of the year following the year age 70-1/2 is attained.

What other advantages do Traditional IRAs have?

• IRA retirement benefits mean added security when needed most.
  
  
• Income tax liability on tax deductible contributions and all earnings is deferred until retirement when taxable income is most likely reduced.
  
  
• Contributions for a given year do not have to be made until April 15 of the following year.
  
  
• Most taxpayers can tax deduct Traditional IRA contributions.

Why a Traditional IRA or Roth IRA from Auto-Owners

• Personal one-on-one service from a qualified, specially trained professional independent agent right in your own community.
• Our Safe. Sound. Secure.® investment management philosophy.
• Begin a Traditional IRA or Roth IRA with as little as $50.
• A statement of contributions made and interest credited is provided each year, or more often upon request.
• Auto-Owners offers a choice of a three or six year fixed interest rate OR a deferred annuity with a portfolio interest rate.
• Retirement income you or your spouse cannot outlive.

What is a Roth IRA?

The Roth IRA is a personal retirement savings plan. Contributions are not tax deductible, however, distributions of earnings are tax free under certain circumstances.

Can I have a Roth IRA?

If you have earned income, you may be able to establish a Roth IRA. You can contribute up to 100% of earned income or $4,000, whichever is less, per year. Taxpayers age 50 and over can make an additional annual "catch-up" contribution. The following table outlines contribution rules:

MARITAL STATUS - MAGI*	CONTRIBUTION
Single- MAGI up to $95,000	Full $4,000 plus $1,000 "catch-up" if applicable
Single- MAGI between $95,000 and $110,000	Partial contribution
Single- MAGI over $110,000	No contribution
Married, filing jointly- MAGI up to $150,000	Full $4,000 each plus $1,000 "catch-up" if applicable, per spouse
Married, filing jointly- MAGI between $150,000 and $160,000	Partial contribution
Married, filing jointly- MAGI over $160,000	No contribution
Married, filing separately- MAGI less than $4,000	Up to income earned
Married, filing separately- MAGI between $4,000 and $10,000	$4,000 plus $1,000 "catch-up" if applicable
Married, filing separately- MAGI $10,000 or above	No contribution

Participation in an employer-sponsored retirement plan does not affect your eligibility for a Roth IRA. Taxpayers with MAGI* of $100,000 or less (whether single or married, filing jointly) are eligible to make a rollover contribution from a Traditional IRA, or an IRA used in a Simplified Employee Pension (SEP) Plan or Savings Incentive Match Plan for Employees (SIMPLE), to a Roth IRA. Check with your tax representative to see if this is beneficial for you.

* Modified Adjusted Gross Income

When can I use my Roth IRA?

The Roth IRA is intended for retirement savings. An individual can make tax free withdrawals of interest if the Roth IRA is at least five years old and one of the following events occurs:

• Attain age 59-1/2
• Become disabled
• Purchase a first home (subject to $10,000 lifetime maximum withdrawl)
• Death

What other advantages do Roth IRAs have?

• Withdrawal of principal contributed each year can be made at any time with no taxation.
• Individuals can make contributions after age 70-1/2 as long as they have earned income and it falls within the MAGI table above.
• No Required Minimum Distributions (RMD) at age 70-1/2.
• Contributions for a given year do not have to be made until April 15 of the following year.
• Distributions of interest is tax-free under certain circumstances (see "When Can I Use My Roth IRA" above).

What are the advantages of using an Auto-Owners deferred annuity to fund my traditional IRA or Roth IRA?

• Safety - Auto-Owners Life Insurance Company has been awarded an A.M. Best rating of A+ (Superior). A.M. Best Company is a leading independent organization for rating financial strength of insurance companies. In addition, Auto-Owners Life Insurance Company was named to the 2004 Ward's 50 Benchmark Group for achieving outstanding financial results in the areas of safety, consistency and performance.
• No set up or annual administration fees.
• Single or multiple deposits for varying amounts can be made at any time.
• You have a choice of current guaranteed interest rates for three or six years, or a fluctuating rate of interest program. Each program includes a minimum 3% guaranteed rate of interest.
• Transfers of eligible retirement plan assets can be made into an Auto-Owners Traditional IRA, therefore eliminating the mandatory 20% Federal income tax withholding when funds are not rolled over.
• You avoid stock market volatility.
• A statement of contributions made, interest credited, Fair Market Value, etc. is provided each year free of charge.
• Convenience - an Auto-Owners Traditional or Roth IRA annuity provides you with numerous ways to liquidate your account. One of them is a monthly lifetime income which you (or you and your spouse) cannot outlive.

Auto-Owners deferred annuity products used to fund Traditional IRAs and Roth IRAs may have restrictions or limitations. They contain surrender charges on early withdrawls, and the IRS imposes a 10% penalty tax for most withdrawls before age 59-1/2.

For additional information, or a personalized illustration, visit an independent Auto-Owners agent near you.

This is intended for general informational purposes only and not intended as legal or tax advice or as a statement of the law.

See a competent tax advisor to help you decide if a Traditional IRA or a Roth IRA is right for you. Then visit an independent Auto-Owners agent.

 

 

Regardless which program fits your specific needs, Auto-Owners Life Insurance Company products are among the best in the industry. We pride ourselves in providing high quality, fairly priced life insurance, disability income, long term care and annuity programs.