IRA'S

TRADITIONAL IRA'S

Individual Retirement Accounts have been called the little guy's tax shelter and Congress's greatest gift to working Americans. IRA's are the most popular type of individual retirement arrangement. It is an excellent method of saving money and certain individuals may be eligible for current year tax breaks, depending on adjusted gross income. For 2002, the contribution maximum is $3,000 and in 2005 it will increase to $4,000, and in 2008 increase to $5,000.*

Any type of security may be used to fund the IRA and the earnings grow tax deferred until money is taken out, usually at retirement. Withdrawals prior to age 59 1/2 may incur a 10% penalty. Remember, in order to contribute to an IRA, the account holder must have earned income. Did you know there are actually 11 different types of IRA's? Debbie Risken can assist you with your IRA selection.

*(This provision is effective through 2010 unless extended by Congress)

ROTH IRA'S

The tax breaks for a Roth IRA are different. Contributions to a Roth IRA are never tax-deductible. However, "qualified" distributions are tax-free. In other words, the Roth offers tax-exempt rather than simply tax-deferred savings. Qualified generally meaning that you are older than age 59 and that the IRA has been open for at least five tax-years. The maximum contributions are the same as those for a traditional IRA, but there are certain limitations as to who can make contributions.

The Roth makes particular sense for people otherwise limited to making non-deductible contributions to a regular IRA. And as of 2001, contributions are fully available to single tax filers making up to $95,000 and couples making up to $160,000. Adjusted gross incomes over $150,000 can only make partial contributions to their Roth IRA's and are completely phased out upon reaching $160,000.*

*(This provision is effective through 2010 unless extended by Congress)

EDUCATIONAL IRA'S

The 2001 tax reform laws really improved the appeal of Educational IRA's (EIRA's) - now known as the Coverdell Education Savings Account (CESA's). CESA's now allow a taxpayer to make a nondeductible contribution up to $2,000 per beneficiary per year for the purpose of paying for elementary or secondary education expenses. The contribution is not deductible but the distributions are tax free as long as the beneficiaries qualified expenses equal or exceed the distribution amount that year. You do not have to have earned income in order to make a contribution like you do for a traditional IRA, but there are limitations on contributions for those who exceed certain levels of Adjusted Gross Income.

This is not an offer of securities in any jurisdiction, nor is it specifically directed to a resident of any jurisdiction. As with any security, request a prospectus from your registered representative. Read it carefully before you invest or send money. Securities products are limited to residents of GA.

Securities offered through Ameritas Investment Corp. (AIC). Member NASD/SIPC. 5900 O Street, Lincoln, NE 68510. 402-467-6900. AIC and Insuramerica are not affiliated.