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General
Q. How do I purchase one of Guardian's products?
A. All of Guardian's annuity, mutual fund, and retirement products are sold through financial professionals. Please contact your financial professional or Guardian at 1-800-221-3253 for more information.
Q. Can I access my account information online?
A. Yes. You can access your account information by clicking on Account Access on the menu bar. From the Account Access page, annuity contractowners will find a link to My Account Manager for annuity contract information and administration. First time users register for online access to their account information by clicking the "First Time User" link. Financial Professionals can access their client accounts from this page, as well.
Q. Do I need to register to use the site?
A. No. The public information site is available without registration. Financial professionals who wish access to their restricted site can register and login after clicking the Financial Professional login link at the top right of the home page of GuardianInvestor.com.
Q. What information is available on the enhanced Guardian Investor site?
A. The new site offers a range of product and educational information, as well as a point of connectivity for account information and certain transactions. Information and new content reflective of the products and services provided by Guardian Investor Services LLC have been combined to provide you with one point of reference at www.guardianinvestor.com. Please
click here
to download a Quick Reference Guide.
Q. Do I need a specific browser to view the GuardianInvestor.com website?
A. GuardianInvestor.com is best viewed using Internet Explorer 5.5 or better.
Annuities
Q. What is the difference between a "fixed" and a "variable" annuity?
A. A fixed annuity carries a defined rate of interest that is credited to the contract's account value while the principal and interest rate are guaranteed by the insurer. The account value of a variable annuity can be invested in several investment options, usually stock or bond subaccounts. Variable annuities fluctuate in value based on the performance of the investments of the underlying subaccounts.
Q. How much money can I put into an annuity?
A. There is generally a minimum requirement, typically $1,000 to $5,000, but you can set aside unlimited amounts in one annuity or any number of different annuities.
Q. Are there any tax advantages to buying a variable annuity?
A. Yes, variable annuities are tax deferred. Tax deferral means that any amount earned in an annuity is not taxed until some point in the future. Interest, dividends and capital gains can accumulate without being subject to current income or capital gains taxes. Income taxes are paid on earnings at the time of withdrawal. A 10% penalty may be incurred on earnings withdrawn before age 59½.
Q. Is an annuity for everyone?
A. No. Monies set aside for short-term needs and emergencies should not be put into a variable annuity. Variable annuities are generally long term retirement oriented investment vehicles.
Retirement
IRA
Q. When do I have to make my IRA contributions?
A. Each tax year, you may make both deductible and non-deductible contributions at any time, up to the due date, generally April 15 of the following year, for filing your income tax return, not including extensions. Of course, the sooner you make contributions to your IRA, the sooner your earnings will begin to grow tax deferred.
Q. Will I have to take distributions from my Roth IRA when I turn 70½?
A. No. You can keep your Roth IRA assets growing tax-free as long as you like. Because there are no required distributions from a Roth IRA, they may make a great estate-planning tool for money you want to pass to your heirs.
Q. What are the portability rules for IRAs?
A. The rules are as follows:
- 401(k), 403(b) and 457 plans may be rolled over to each other and into IRAs
- Traditional IRA assets may be rolled into the 401(k), 403(b) and 457 plans
- After-tax contributions in a qualified plan may be directly rolled into an IRA
401(k)
Q. What is a 401(k) plan?
A. A 401(k) plan is a retirement plan set up by the employer. It is a simple and convenient way for an employee to build up their retirement savings and get significant tax benefits while they are working.
Q. What is the maximum salary deferral that can be contributed to a 401(k)?
A. For, 2003, the maximum pretax contribution a participant can make is $12,000. The limit will rise by $1,000 a year until 2006, when it will hit $15,000.
Employees who turn age 50 or older within the end of the plan year are permitted to make "catch-up" contributions that exceed the regular 401(k) contribution limits. For 2003 the catch-up contribution is $2,000.
Q. What happens if an employee leaves the company?
A. If an employee leaves the company, they have three options for what to do with the vested portion of their 401(k) account. They can:
- Leave the money where it is. If their account balance is $5,000 or more and they are under the plan's normal retirement age, the money can stay where it is. However, if the balance is less than $5,000 and more than $1,000, you can automatically roll it into an IRA account on the employee's behalf.
- Roll the money into a new 401(k) plan or an IRA. If they do a direct rollover, they won't owe taxes until the money is withdrawn from the account.
- They can elect to take their money out of the 401(k) and not roll it over into an IRA or another employer-sponsored retirement plan. However, they will owe all applicable taxes as well as a 10% early withdrawal penalty unless they leave the company during the year they turn 55 or later.
Q. What is the penalty for taking money out of a 401(k) before age 59½?
A. Since the money in a 401(k) plan is intended for retirement, there's a 10% penalty plus applicable federal, state and local taxes for taking the money before reaching age 59½ (or age 55 in some cases). However, money can be withdrawn penalty-free under certain circumstances, such as disability and death. Additionally, a plan may include provisions for loans and/or hardship withdrawals.
Q. What are the portability rules for 401(k)s?
A. Rollovers are now permitted between 401(k), 403(b) and 457 plans. However, it is up to the individual employer to determine which type of rollovers they accept.
412(i)
Q. What is a 412(i) plan?
A. A 412(i) plan is a defined benefit plan that must be fully invested in an insurance or annuity contract. A defined benefit plan guarantees participants a specific monthly benefit at retirement. There is no specific dollar limit on the individual contribution or deductible amount. The IRS only limits the amount that the participant may receive from the plan. Currently, the maximum benefit is the lesser of $160,000 of annual income or 100% of compensation. The $160,000 limit will be reduced if the retirement occurs before age 62 or if the employee has less than 10 years of participation in the plan.
Each year the employer is required to contribute the amount determined by an actuary to be necessary to fund the benefits earned that year plus any past service benefits, if applicable.
Q. What are some of the advantages of a 412(i) plan?
A. 412(i) plans work well for the older small business owners who typically invest conservatively. The use of favorable investment returns as a credit against future level premium obligations could result in potentially larger contributions and deductions in the early plan years, with decreased contributions as retirement draws near. In addition, the owner should have a stable income and desire a guaranteed income at retirement.
Some of the other advantages of the 412(i) plan are:
- Tax deductible contributions reduce current taxable income and increase tax deductions
- All asset accumulations rates and plan benefits are guaranteed;
- Easier and less expensive to administer since an enrolled actuary is not required;
- Simpler than other defined benefit plans as it is exempt from complex minimum funding rules.
Q. What type of small business is a 412(i) plan ideally suited for?
A. While virtually any business can set up a 412(i) plan, a company without, or with very few (6 or less, for example), employees, is the ideal candidate. In addition, this plan works best when the business owner is between the ages of 40-70, or within 10 years of retirement, because this type of plan favors older participants. In fact, this plan works very well for those owners who haven't been able to save much for retirement and would like to save a substantial amount in a relatively short period of time.
Due to the fact that contributions must be made every year and because those contributions are generally substantial, this type of plan works best for a small business owner who runs a well-established and highly profitable company.
Q. What is a defined benefit plan?
A. A defined benefit plan is a type of pension plan in which the employer puts money into an account setup for the employee. The employee is then guaranteed a lifetime income based on a specific formula. The amount the employer contributes does not increase the employee's taxable salary or decrease it.
Q. What type of employer is this plan best suited for?
A. Any employer that wants to provide a specific benefit at retirement, looking to benefit older employees, and can sustain the annual contribution requirements.
Q. What is the maximum limit on contributions?
A. There is no specific dollar limit on the individual contribution or deductible amount. The IRS only limits the amount that the participant may receive from the plan. Currently, the maximum benefit is the lesser of $160,000 of annual income or 100% of compensation.
Q. When must a qualified plan be established by?
A. The plan must be established by the last day of the employer's taxable year.
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