Retirement Savings

The Providence Association offers many opportunities for retirement savings which provide safe, steady and guaranteed income growth. Members can choose from a vast array of savings vehicles:

Annuities
Traditional IRA and Roth IRA
SEP and SIMPLE IRA pension plans
Whole Life Insurance

We do not charge “loads”, which include administrative charges, costs and fees, like other companies. This insures that every dollar that you invest will work for you.

Save for Retirement

Retirement seems so far away, but time flies. It does not matter what age you are; it is necessary to save for retirement. Life is expensive, and since we are living longer and healthier lives, we need to prepare for the future. According to an article written on Bloomberg.com, all over the world, individuals need to save more. Social Security will not be enough to support a good quality of life in our future, and it looks like even 70% of pre-retirement earnings may not cover it either. Read our article “how much is enough“, where we write about different retirement dreams and what may be ideal amounts to save to live those dreams.

There are many options to save. IRA and Roth IRAs are save accounts where you can deposit money each year. Even if you take advantage of the 401k through your job, opening an additional account, such as an annuity may also be beneficial for you and your family.

Save for Education

The Tax Payers Relief Act of 1997 established the Roth IRA and all other IRAs accessible to unrestricted, penalty free “early”(pre-age 59.5) withdrawals for tuition for higher education. Coupled with increased contribution limitation, IRAs have become a good means of setting aside a college fund for children.

Annuities are also a great option for grandparents who want to help with college tuition, or parents who had children later in life, that would like to help out with paying for college tuition.

In such cases, the planned withdrawals would presumably occur after the investor had turned age 59.5, thereby entirely avoiding early withdrawal penalties.

Best Retirement Saving Accounts

Providence Association Annuities and IRA Annuities offer a 3.50% interest rate!

Traditional IRA and Roth IRA

An Individual Retirement Account (IRA) is one of the best and easiest ways to save for your future. Legislation enhancements to the IRA, include increased contribution limits and opportunities to use the savings for a college education or a home purchase, with a $10,000 allotment for a first-time home purchase.

With the Traditional IRA, the interest earned, is tax-deferred, and in some cases, even the contributions are tax deductible. With the Roth IRA, interest earned is completely tax free! Consult your tax or financial advisor to determine your opportunities. The effective growth rate of a 3.50% tax-deferred or tax-free IRA or annuity, as offered by Providence, is up to 5.55%, depending upon the investor’s tax bracket.

IMPORTANT NOTICE: FOR Additional important information (inter alia, Contribution, Adjusted Gross Income and other Limits and Qualifications) Affecting Your IRA, SEP IRA and Roth IRA Savings and Contributions for 2020 & 2021 (Click: Download Guide)

Annuity

Annuities do not have contribution restrictions like IRAs, and there are many plans which may be an ideal investment for any situation. Annuities are a ideal savings’ plan that offer an opportunity to accumulate additional retirement income and wealth because all earnings are tax deferred until withdrawal.

Our annuity plans earn 4.00% annually, on your contribution and any earnings made while the annuity is open. As in the case of IRAs, the tax-deferral feature makes the effective growth rate over 6%!

Unlike other types of insurance, you don’t pay annuity premiums indefinitely. Eventually, you you enter the payout phase and no longer need to contribute any money into the annuity. You can then design your own withdrawal plan or have Providence Association structure one for you with a choice of monthly payment schemes and durations.

Our annuities offer great flexibility in how annuity deposits and withdrawals are handled. Bear in mind, however, that as with IRAs and 401(k)s, earnings withdrawn before age 59½ may be subject to a 10 percent federal tax penalty on accumulated interest. Likewise, annuity income is taxed as ordinary income the year it is received.

We always recommend consulting with your tax professional or financial adviser before making investment decisions. But, if you have any questions, feel free to contact us.

SEP and Simple IRAs Savings Plans

These plans offer a unique opportunity to make enhanced contributions into IRAs for small business owners and their employees. SEP IRA is best for companies with less than 10 employees. It works like a Traditional IRA, but offers higher contribution limits, which can be adjusted each year. The employer makes the equal percentage contributions for everyone in the company. Employees can both receive employer contributions to a SEP-IRA and make regular, annual contributions a personal traditional or Roth IRA.

A SIMPLE IRA is similar to a 401K plan, and ideal for companies with less than 100 employees. With this plan, the employer must either match the contributions employees make to their plan, up to 3% of salary. Or the employer can make contributions of a flat 2% of salary, whether or not the employee chooses to participate in the plan.

If you plan to change jobs, Providence will accept and arrange your 401K. Contact us to learn more information.