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March 2011

Is your IRA working for you?

One easy way to save for retirement is to contribute to an IRA – a traditional or a Roth. So if you don’t already have an IRA, now may be a good time to establish one. Which type may be suitable for you depends upon several factors, such as your age, income and whether you have an employer-sponsored plan at work.

Is your IRA working for you

Recent studies indicate that over the past few years, just a fraction of investors who hold traditional IRAs made annual contributions, and only about one in 14 took full advantage and maxed-out their contributions.1

If you have an IRA and you understand its benefits – as well as how it can help you move toward a secure financial future – 21st Century Insurance has one question for you: Is your IRA working as hard as it could for you?

Here are some tips to consider:

• Did you contribute in 2010?
If not, you have until April 18, 2011, to make IRA contributions for the 2010 tax year. See the chart below for contribution information.

• Are your beneficiary designations up to date?
If something happens to you while you still have assets in your IRA, your beneficiary designation form will determine who receives those assets. Make sure your forms are up to date and filed with your IRA custodian.

• Have you rolled everything over?
Today, frequent job changes are not uncommon, so it’s not unusual to have several employer-sponsored retirement plans. While there may be some advantages to keeping those accounts open, you can simplify your life by rolling them all into a single IRA. You may be able to preserve tax-deferred features, streamline your finances, save money on annual fees and organize your record keeping.

Let Farmers Life® help you with your retirement plans
To find more information on the many options Farmers Life® offers, visit the Life Insurance section of 21st.com. We can help make sure that your retirement accounts are working their hardest for you.

2010 Plan year contribution limits and deadlines

Plan Under age 50 Age 50 or older Deadline
Roth IRA $5,000 $6,000 April 18, 2011
Traditional IRA $5,000 $6,000 April 18, 2011

Source: http://www.irs.gov/retirement/participant/article/0,,id=188232,00.html

Additional “catch-up” contributions are included in amounts shown above for those who are age 50 or older. At any age, your contribution can be split in any way between a traditional IRA and a Roth IRA. The maximum deductible contribution to a traditional IRA and the maximum contribution to a Roth IRA may be reduced depending on your modified adjusted gross income.

Consult your tax and legal professionals.

Annuities issued by Farmers New World Life Insurance Company, Mercer Island WA.

See Individual Retirement Arrangements (IRAs), Publication 590, for additional information.

1Source: http://www.ici.org/pdf/rpt_10_ira_contributions.pdf

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