Approximately 39 million Americans are covered by some form of employer-sponsored retirement plan. An almost equal amount have no form of retirement plan other than Social Security. Keogh Plans offer unincorporated employers an easy way to set aside retirement funds for themselves and their employees. Qualified retirement plans are an excellent way to supplement Social Security. They offer sponsoring employers tax advantages and at the same time help them attract and retain quality employees. Retirement can be the greatest years of your life. Start by saving now. You'll be amazed at how much you can increase your retirement income with a Keogh Plan from Erie Family Life. It's a great idea!

What Is a Keogh Plan?

A Keogh is a tax-favored retirement plan that allows an employer to make contributions to a retirement program for employees. To be eligible, employees must meet the plan's age and service requirements. The minimum age requirement can be no higher than 21. Generally the maximum service requirement can be no longer than two years. As an owner-employee, you must meet any eligibility requirement established for employees.

How Much Can a Business Contribute?

As a general rule, businesses can contribute up to 25 percent of each participant's earned income as defined in the Internal Revenue Code, subject to a maximum of $30,000 per participant. A smaller percentage can be elected. The percent of compensation you choose must be the same for all participants.

Can Employees Make Voluntary Contributions?

No. Keoghs are employer-paid plans.

When Can I Take My Money Out of a Keogh Plan?

Withdrawals and retirement benefits can be taken out at any time. Certain penalties apply to distributions made before age 59 1/2. There are exceptions that avoid the penalty. Consult your tax advisor to determine if there will be any penalty imposed on such premature distributions. In addition, you must begin taking at least the required minimum annual distribution from your Keogh by April 1 of the year following the year in which you reach age 70 1/2.

When Do I Pay Taxes on My Keogh?

Keogh benefit payments are reportable as ordinary income in the year they are received.

What Settlement Options Do I Have at Retirement?

Erie Family Life offers a variety of settlement options. With careful planning you can design a benefit schedule to meet any need or situation. Some of the more popular options include:

• A Life Annuity - Pays an income for as long as you live.
  
• A Period Certain Annuity - Pays an income for a specified number of years including a lifetime income.
  
• Payments of a Fixed Amount - Pays a fixed amount until the account value is exhausted.
  
• Interest Only - Pays the interest earnings on a periodic basis, thereby preserving the account value.
  
• A Joint and Survivor Annuity - Pays an income for as long as either you or the joint annuitant is alive. In the event of death during the benefit payment period, any remaining guaranteed payments are paid according to the original benefit schedule to the designated beneficiary.
  

What Makes an Erie Family Life Keogh So Attractive?

• Flexibility of Premium Payments - You can establish a Keogh with a one-time premium payment, or a Flexible Premium Retirement Annuity designed to accept periodic contributions.
  
• Flexibility of Settlement Options - You can select from a variety of settlement options that can be tailored to your situation. You can even select a lifetime income option that provides an income you cannot outlive.
  
• No "Front-End" Loads or Expense Charges - The only charge applicable to an Erie Family Life annuity is a graded surrender charge imposed on partial or complete surrender made within the first five years of the contract.
  
• Proceeds Not Subject to Probate - Proceeds paid to a named person as a result of the annuitant's death are not subject to probate.
  

The Thomas M. Frick Insurance Agency can provide you with the necessary information and procedures to start an Erie Family Life Keogh today.

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