December 17, 2007

You and Your Money - Part 1

By now many of you have probably heard of various ways and plans to make your money grow, with promises of unbelievable returns on your investment. While some investments may offer these incentives, YOU and only you must be the judge that the investment is in your best interest. Remember, if it sounds too good to be true, it probably isn’t.

In the August 8, 2007 issue of The Wall Street Journal, an article by Kelly Greene states: Backlash Hits Annuities Tied to Stock Market - Wave of Lawsuits Take Aim At Sales Practices, Suitability of Equity-Indexed Products. Equity-Indexed annuities can be complex. Make sure you understand how gains will be calculated and check for hidden penalties for early withdrawals. These annuities may not be suitable for older adults because funds may be locked for several years.

"Equity-indexed annuities have emerged as the vehicle of choice for unscrupulous insurance agents," says Roxanne Rehm, assistant general counsel for the Florida Department of Financial Services. Older investors, she contends, "don't realize they're long-term investments, and once they realize they can't access the funds, it's usually too late."

The article continues on with many of the advantages and disadvantages of equity indexed-annuities.

The October 15,2007 issue of the National Underwriter Life and Health states:

In the future, agents will get detailed information about the finances of older annuity prospects to make sure they have enough liquid assets and disposable income to pay for ongoing living expenses and emergencies without having access to all of the money on the deferred annuity. The suitability process will include questions about a senior's income, living expenses, liquid assets and anticipated changes in finances.

It’s good to know... that as a fraternal benefit Society the PRCUA offers 3 different Series of Flexible Premium Deferred Annuities to members. (We DO NOT offer Equity Indexed annuities.) Each can be treated as an IRA (Qualified) or Non-IRA (Non-Qualified) Annuity. They are:

• PREFERRED SERIES - 5% flexible premium deferred annuity minimum $5,000 deposit, no withdrawal penalty.

• CLASSIC SERIES - 5.5% flexible premium deferred annuity minimum $5,000 deposit, 3-year withdrawal penalty (3% 1st yr., 2% 2nd yr., and 1% 3rd yr.).

• MILLENNIUM SERIES - 6% flexible premium deferred annuity minimum $300 Deposit, 7-year withdrawal penalty (8% 1st yr., 7% 2nd yr., 6% 3rd yr., 5% 4th yr., 4% 5th yr. , 3% 6th yr. and 1% 7th yr.)

Your initial investment and additional deposits received in the Home Office by the 15th of the month earn interest from the first of the month.

Note: Standard contribution limits to IRAs were raised to $4,000 effective in 2005. Starting January 1, 2008, standard contribution limits will increase to $5,000. (Individuals over 50 may qualify for catch-up provisions.)

In each of the above annuity series, if the deposits total more than $25,000, the interest can be paid monthly to the member, if he or she is older than 59 1/2 years.

Withdrawals are subject to the IRS tax regulations for your age and income tax bracket, at the time the withdrawal is made.

In addition, the PRCUA offers its members:

• A Guaranteed Rate for one Year

• Tax Deferred

• No Service Charges

• FREE 10% Annual Withdrawal

• Additional FREE Withdrawal under certain health and catastrophic conditions

• Guaranteed 3% Minimum Interest rate through the life of the contract

• Surrender charge waived upon death.

PUT YOUR MONEY TO WORK FOR YOU!

Contact your local Agent/Deputy or one of the PRCUA branch offices in OH (216) 883-3131, PA (215) 425-3807 or WI (414) 281-6281 or the Home Office Membership Department toll-free at 1-800-772-8632 or (773) 782-2600.

We will answer your questions and help you determine which plan is best suited for your needs. We are here to help secure your financial future.