How is it determined?

The five-year rule is based on five calendar years, which includes the year you opened the Roth. So even if you opened your Roth on December 31, 2009, you still get credit for the entire year. The five-year period would be satisfied on January 1, 2014.

Order of Withdrawals

Withdrawals from Roth IRAs follow a specific sequence which actually helps the owner avoid taxes and penalties. When you take a withdrawal, the money comes out as follows:

The timing and reason for a withdrawal can impact your income taxes if it’s not done properly.

Because of the tax implications to withdrawing money too soon, Roth IRAs are most effective when you can leave the money for at least five years. The following is a guide to help clarify the application of the five-year rule so that you, along with your financial advisor, can decide whether a Roth IRA fits into your retirement strategy.

0110:1303005

Not FDIC Insured Not Bank Guaranteed May Lose Value

Not a Deposit Not Insured by Any Federal Government Agency

Not FDIC Insured Not Bank Guaranteed May Lose Value Not a Deposit Not Insured by Any Federal Government Agency

The Five-Year Rule for Roth IRAs

One of the most compelling reasons to consider a Roth IRA is the ability to provide tax-exempt income during retirement. Understanding the rules is important to maximizing this potential benefit.

Issued by John Hancock Life Insurance Company (U.S.A.) New York: John Hancock Life Insurance Company of New York

Contributory Amounts1Converted Amounts2Earnings3

This refers to your annual Roth contributions. For example, if you meet the income restrictions, you can contribute $5,000 for 2009 ($6,000 if age 50 or older). These annual contributions may be withdrawn income tax and penalty free at any time.

Dave: Withdrawing Contributions1

Dave is 47 years old and opened a Roth IRA three years ago, making a $5,000 annual contribution each year. His Roth account is now worth $18,000 ($15,000 contributory and $3,000 in earnings). Dave decides to withdraw $10,000 as a down payment on a new car.

Result: No taxes or penalty will applySince contributory amounts are after-tax money, they can be withdrawn at any time for any reason.

Contributory Amounts1

NOTE If Dave’s withdrawals had exceeded his contribution to his Roth IRA, his earnings would be subject to both a 10% penalty and ordinary income tax.2

Converted amounts are subject to income taxes at the time of the conversion, so you won’t ever have to pay income taxes on that money a second time. But if you pull converted dollars out before five years, you may owe a ten percent early withdrawal penalty. Each converted amount carries its own 5-year period. The penalty is waived if the withdrawal is for certain approved exceptions.

Jen: Withdrawing Converted Assets1

In 2008, Jen, who is 45 years old, converted her $100,000 traditional IRA to a Roth IRA, paying the taxes from her savings account. She has made no contributions to the Roth and her account is now worth $110,000. Jen is buying her first home and needs $10,000 for a down payment.

Result: No taxes or penalty will apply Jen can safely withdraw the $10,000 from her Roth IRA, because withdrawals by qualified first-time home buyers are exempt from the 10% penalty.

Converted Amounts2

NOTE If Jen’s withdrawals did not meet one of the exceptions it would be subject to penalty because it has not been five years since the conversion.2

Should I withdraw some of my converted assets?

No Yes

No

The distribution is not subject to income tax

or a 10% penalty.

Has the five-year hold been satisfied?

The distribution is not subject to income tax, but is subject to

a 10% early withdrawal penalty.

The distribution is not subject to income tax

or a 10% penalty.

Is the distribution due to one of the following?

• Owner attained age 591/2

• Death or disability of the owner as defined by 72(m)

• Qualified first-time home purchase

• Qualified medical expenses

• Health insurance premiums while unemployed

• As part of a series of substantially equal periodic payments

• Qualified higher education expenses

Yes

1 Hypothetical example is not indicative of any portfolio or product. Any associated fees have not been calculated, and if they had been, returns would be lower.2 Source: IRS Publication 590, 2009.

Mike: Withdrawing Earnings1

Mike is 50 years old and converted his $40,000 Roth in 2002. Mike had 7% annual growth during this time (if Mike experienced 0% growth there would be no earnings to consider) with a resulting account balance of $64,231. Mike experienced a medical emergency that is not expected to result in a permanent disability. He incurred related medical expenses exceeding $65,000. To pay those expenses, Mike liquidated his Roth IRA.

Result: No penalties will apply, but income tax will need to be paid on the earnings withdrawn• Mikewillnotpayincometaxesonthewithdrawalofconvertedamounts.

Nor will Mike incur a 10% penalty on the $40,000 he initially converted, because the five-year period has passed.

• Healsoavoidsthe10%penaltybecausequalifiedmedicalexpensesare an exception to the early withdrawal penalty.

• Mikewill,however,havetopayincometaxesonthe$14,231ofearnings. This is because he is not yet 591/2, and the withdrawal is not due to death, disability, or first-time home purchase.

Remember, the earnings inside a Roth IRA have never been taxed, so if earnings are withdrawn before the five-year period is complete they may be subject to income taxes. Further, unless you fall under one of the recognized exceptions, the earnings may also be subject to the 10% penalty on premature distributions.

NOTE Because the five-year period has passed, Mike will not pay income taxes on the withdrawal of $40,000 in converted amounts, nor will he incur a 10% penalty.

Earnings3

Questions to ask when considering a withdrawal of earnings

Is the distribution due to one of the following?

• Owner attained age 591/2

• Death or disability of owner as defined by 72(m)• Qualified first time home purchase

Is the distribution due to one of the following?

• Owner attained age 591/2

• Death or disability of the owner as defined by 72(m)

• Qualified first-time home purchase• Qualified medical expenses• Health insurance premiums while unemployed• Qualified higher education expenses

This distribution is subject to income

tax, but is not subject to an early

withdrawal penalty.

This distribution is subject to income

tax, but is not subject to an early

withdrawal penalty.

This distribution is subject to income

tax and a 10% early withdrawal penalty.

This distribution is subject to income

tax and a 10% early withdrawal penalty.

Has the five-year hold been satisfied?

This distribution

is not subject

to income tax or early withdrawal.

Is the distribution due to one of the following?

• Qualified medical expenses• Health insurance premiums

while unemployed• Qualified higher education

expenses

Yes

Yes

Yes

Yes

No

No

No

No

1 Hypothetical example is not indicative of any portfolio or product. Any associated fees have not been calculated, and if they had been, returns would be lower.

Contact 800-334-4437 or visit www.jhannuities.com for more information, including product and fund prospectuses that contain complete details on investment objectives, risks, fees, charges, and expenses, as well as other information about the investment company, which should be carefully considered. Please advise your clients to read the prospectuses carefully prior to purchasing. The prospectuses contain this and other information on the product and the underlying portfolios.

When considering an annuity for use in an IRA or other tax-qualified retirement plan (i.e., 401(k), 403(b), 457), it is important to note that there is no additional tax-deferral benefit, since these plans are already afforded tax-deferred status. Thus, an annuity should only be purchased in an IRA or qualified plan if some of the other features of the annuity are of value, such as access to specific portfolio choices, the ability to have guaranteed payments for life and other guaranteed benefits, and you are willing to incur any additional costs associated with the annuity to receive such benefits. See the prospectus for details.

Variable annuities are not FDIC insured, are long-term contracts designed for retirement purposes, and are subject to investment risk, including the possible loss of principal. Withdrawal and distributions of taxable amounts are subject to ordinary income tax, and if made prior to age 591/2, may be subject to an additional 10% federal income tax penalty. Withdrawals will reduce the death benefit and cash surrender value.

This material was prepared to support the promotion and marketing of variable annuities. John Hancock, its distributors, and their respective representatives do not provide tax, accounting, investment, or legal advice. Any tax statements contained herein were not intended or written to be used, and cannot be used for the purpose of avoiding U.S. federal, state or local tax penalties. Please consult your own independent advisor as to any tax, accounting, investment, or legal statements made herein.

Venture Combination Fixed and Variable Annuities are distributed by John Hancock Distributors LLC, member FINRA.

Venture® is a registered service mark of John Hancock Life Insurance Company (U.S.A.) and is used under license by John Hancock Life Insurance Company of New York.

Application of the five-year rule can be complicated. As a general rule, Roth conversions work better the longer you can go without touching the money. At a minimum, you should be prepared to wait five years before making a withdrawal. We can help provide the answers. Start by working with an advisor. Do you have someone to help you set long-term financial goals and plan for the future? Trained financial professionals have the experience it takes to help you make the best decisions to suit your individual needs and preferences and who can help determine if a Roth IRA fits into your retirement strategy. The decisions of whether to convert or how much to convert require careful consideration. John Hancock is an industry leader in providing quality education on the 2010 Roth conversion opportunity. In the right situation, a Roth conversion can have many benefits, but the decision to convert, or how much to convert, should be done with careful consideration. Talk to your financial advisor today about whether the 2010 opportunity is the right opportunity for you.

Plan ahead, make sure you’re on the right path

Issuer and AdministratorJohn Hancock Life Insurance Company (U.S.A.), Bloomfield Hills, MI (not licensed in NY)New York: John Hancock Life Insurance Company of New York, Valhalla, NY

John Hancock Annuities Service CenterP.O. Box 9505 Portsmouth, NH 03802-9505 800-344-1029New York Contracts: P.O. Box 9506 Portsmouth, NH 03802-9506 800-551-2078

www.jhannuities.com www.jhannuitiesnewyork.com

©2009 All rights reserved.