Easy IRA

Now You Can Save Even More
With their tax-advantages¹, IRAs have always been an excellent way to save for retirement. As of 2002, you can save even more for your retirement as the maximum annual contribution limit for IRAs ($2,000 in 2001) has been increased substantially. New tax law also enables individuals age 50 or over to make "catch up" contributions of $500 each year for tax years 2002 through 2005. An additional $1,000 catch up contribution can be made in 2006 and thereafter.

Contribution Limits
Tax Year	Standard IRA Limit*	Those Aged 50 and Over
2002	$3,000	$3,500
2003	$3,000	$3,500
2004	$3,000	$3,500
2005	$4,000	$4,500
2006	$4,000	$5,000
2007	$4,000	$5,000
2008	$5,000	$6,000
*For tax years beginning in 2008 and thereafter, the $5,000 limit will be adjusted for inflation in $500 increments.

Your IRA Options
Protective offers a wide range of IRAs. With so many products and investment choices available, your Protective IRA can be as individual as you are. Your options include:

Traditional IRA
In a traditional IRA, earnings grow tax-deferred. That means earnings (and deductible contributions) are taxed upon withdrawal. However, with a traditional IRA, annual contributions—and catch-up contributions, if you qualify—may be tax-deductible. (See the contribution limit chart above.) Any working taxpayer under 70 1/2 can contribute to a traditional IRA.

Roth IRA
In a Roth IRA, earnings grow tax-free and there are no taxes when those earnings are withdrawn (subject to certain restrictions²). While you can withdraw contributions at anytime without being penalized or taxed, contributions are not deductible on your tax returns. While there is no age limit to contribute to a Roth IRA, you must meet certain modified adjusted gross income requirements.

Rollover IRA
A rollover IRA enables you to "rollover" a distribution from an employee-sponsored retirement plan such as a 401(k) to an IRA instead of taking the distribution in cash. By doing so, you avoid early withdrawal penalties and income tax on the distribution.

SEP-IRA
The Simplified Employee Pension (SEP) IRA is ideal for small business owners like doctors, independent contractors, freelancers, or those with a family business. Annual contribution limits for 2002 are 15% of total net compensation or up to $30,000 per year. Contributions are tax-deductible, earnings grow tax deferred, and it is relatively simple to administer.

Simple IRA
A Savings Incentive Match Plan for Employees (SIMPLE) IRA is a tax-deferred retirement plan offered by sole proprietors or businesses with less than 100 employees who do not maintain or contribute to any other retirement plan. The maximum annual employee contribution for 2002 is $7,000. In addition, employer contributions must be either a 100% match for all employees (up to 3% of your total compensation), or 2% for all eligible employees (to a maximum of $3,200).

Start on your path today
To take a step towards a comfortable retirement, please contact your Protective representative today.

¹ Distributions subject to tax. Distributions prior to age 59 1/2 are subject to an additional 10% tax penalty.

² Contributions can be withdrawan at any time with no taxes or penalties.
Earnings can be withdrawn with no penalties or taxes if the account is 5 years old and the holder is 59 1/2; for disability or death; for certain home purchases.
If earnings are withdrawn before account is 5 years old or the holder is 59 1/2, earnings are subject to 10% penalty and taxes.

Important Note: The information listed represents Protective's current understanding of tax laws impacting IRAs. This information is not intended to be exhaustive and is not intended to constitute tax advice. For advice as to your specific tax situation you should consult your tax attorney or tax advisor.