TSA

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TSA - A Tax-Sheltered Annuity

If you are an employee of a public school or other non-profit, tax-exempt organization, a Tax-Sheltered Annuity from Erie Family Life is a great idea. A Tax-Sheltered Annuity is a type of pension plan for employees of public schools and other entities which qualify as non-profit, tax-exempt organizations according to the Internal Revenue Code. Organizations include hospitals, medical schools, parochial schools, private colleges and universities, religious organizations, non-profit foundations and charitable institutions. Contributions to a Tax-Sheltered Annuity help you save for retirement in several ways:

Contributions are made through payroll deduction making it easier than ever to save for retirement.
Qualified contributions are not subject to current federal income taxes allowing more of your money to work for you.
Interest earnings are tax-deferred until you take money out. Retirement can be the greatest years of your life.
Start now by saving a small portion of your income every pay period. You will be amazed how much you can increase your retirement income with a Tax-Sheltered Annuity from Erie Family Life.

How Do I Make Contributions?

Contributions to a Tax-Sheltered Annuity must be made through payroll reduction. In other words, your employer must agree to withhold part of your earnings and remit them to Erie Family Life. You cannot make payments directly to Erie Family Life. A written salary reduction agreement must be maintained between you and your employer, and renewed or rewritten annually.

How Much Can I Contribute?

The maximum salary reduction for a Tax-Sheltered Annuity can be as high as $9,500. However, individual circumstances can limit this amount. Consult your tax advisor before signing your salary reduction agreement to determine the amount of your eligible contribution.

When Can I Take Money Out of My TSA?

Withdrawals and retirement benefits can be taken out at any time. However, certain penalties can apply to withdrawals made before age 59 1/2. Retirement benefits, if received in equal payments over life expectancy, can begin as early as age 55, without penalty, as long as the employee is retired. Minimum distribution must be taken by age 70 1/2. Consult your tax advisor before taking money out of your TSA to determine if there will be any penalty imposed.

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 TSA So Attractive?

Flexibility of Premium Payments - You establish a Tax-Sheltered Annuity through a salary reduction agreement with your employer. Payments are made every pay period.
Optional Waiver of Premium Benefit - This benefit provides for the continuation of annuity premium payments should you become permanently disabled as provided for in the contract.
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 TSA today.

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