The Taxpayer Relief Act of 1997 created a new Individual Retirement Annuity (IRA) known as a Roth IRA which differs from the Traditional IRA. Both IRAs are authorized by the federal government to help you accumulate funds for your retirement.

If you receive compensation in 2007 for personal services (wages, salary, commissions, tips, etc.) you may contribute an amount equal to such compensation up to $4,000 ($5,000 if age 50 or older) to a Roth IRA, as long as your Adjusted Gross Income (AGI) doesn't exceed $156,000 (joint filers) or $99,000 (single filers). You can make partial contributions of less than $4,000 ($5,000 if age 50 or older) if your AGI is between $156,000 and $166,000 (joint filers) or between $99,000 and $114,000 (single filers).

If your spouse doesn't work outside the home and your compensation is at least $8,000 ($10,000 if age 50 or older) you can also contribute up to $4,000 ($5,000 if age 50 or older) to your spouse's IRA, provided your compensation is at least $8,000 ($10,000 if age 50 or older) and your AGI doesn't exceed $156,000 and you file a joint tax return. You can make contributions to your Roth IRA any time up to and including the due date of your federal tax return for the previous year, namely April 15.

Although you can't deduct contributions to a Roth IRA, you can benefit from its many other advantages:

• Tax-Free Earnings Growth. Like a Traditional IRA, you won't pay any taxes on any earnings while they remain in a Roth IRA.
• Tax-Free and IRS Penalty-Free Withdrawals. Roth IRA contributions (principal) are made with after-tax dollars. The contribution comes out first when you take a distribution. You may withdraw these contributions anytime, tax-free and IRS penalty-free, provided your total distributions from your Roth IRAs don't exceed your total Roth IRA contributions. Unlike a Traditional IRA, you won't owe any taxes or penalties on earnings you withdraw from a Roth IRA as long as your annuity has been established for at least 5 years and you are over age 59 1/2.

As long as your Roth IRA has been established for at least 5 years, you can take tax-free and IRS penalty-free withdrawals ($10,000 lifetime limit) prior to age 59 1/2 to apply toward buying a home for you, your spouse, your children or your grandchildren.

You can also withdraw from your Roth IRA prior to age 59 1/2 to pay for eligible higher education expenses for you, your spouse, your children or your grandchildren without being subject to the 10% IRS penalty. Withdrawals in excess of contributions are, however, subject to income taxes.

All of the situations that previously qualified for IRS penalty-free withdrawals were also retained by the Taxpayer Relief Act of 1997. You can also withdraw money from your Roth IRA without an IRS penalty for the payment of major medical expenses (exceeding 7.5% of your AGI); payment of health insurance premiums by certain unemployed individuals; death or disability of the IRA owner; and distributions by way of certain substantially equal periodic payments.

The Roth IRA does not require minimum distribution beginning at age 70 1/2, giving you additional time to take advantage of tax-free earnings. In fact, you are never required to withdraw your money at any age, so you can pass your Roth IRA assets on to your beneficiaries if you wish.

There is a UTUIA surrender charge of 5% for the first through third policy years, decreasing 1% per year through the seventh year. After seven years, 100% of the annuity value can be withdrawn without a UTUIA surrender charge. In addition, after the first policy year, 10% of the annuity value may be withdrawn once per policy year without a UTUIA surrender charge.

Note: All references to tax deduction and taxation of benefits refer only to the federal income tax law. Check state law for the applicability of state income taxes to IRA earnings distributions.