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FDIC-Insured Deposits for Retierment: Now Guaranteed Up to $250,000Individual Retirement Accounts

The IRA Advantage


 

Who may contribute to an IRA?

Anyone who has earned income from working and does not reach age 70 1/2 this year may contribute to an IRA on or before his or her tax return deadline, excluding extensions. If you qualify for an IRA contribution, you may contribute up to $5,000 ($6,000 if you are age 50 and over) or 100% of your earned income from working, whichever is less.

Why should I contribute to an IRA?

Many Americans save through IRAs because, like you, they want to enjoy a comfortable retirement. A comfortable retirement begins with sound financial planning, and that's exactly what an IRA represents -- part of a sound financial planning package. IRAs offer you a number of advantages.

  • Security - By contributing to an IRA, you are taking an important step toward a secure financial future.
  • Tax-Deferred Earnings - All IRA earnings are tax-deferred. This means your IRA earnings are not taxed until you take withdrawals from your IRA.
  • Tax Deductions - You may be eligible to deduct all or part of your IRA contribution.
  • Flexibility - Each year you decide whether you want to contribute to your IRA. You are never required to make IRA contributions.
  • Accessibility - Unlike some retirement plans which only allow distributions at certain times, your IRA funds are always yours. You may withdraw them whenever you wish.*

Are IRA contributions tax deductible?

To find out whether you are eligible for an IRA tax deduction you must first determine if you (and/or your spouse, if applicable) are considered an active participant in an employer's retirement plan. If you (and/or your spouse) are an active participant in a retirement plan at work, your IRA deduction limit depends on your modified adjusted gross income (MAGI).

Find out if you are eligible to deduct your IRA contributions

If neither you nor your spouse was covered for any part of the year by an employer retriement plan, you can take a deduction for total contributions to one or more of your traditional IRAs of up to the lesser of:

  • $5,000 ($6,000 if you are age 50 or older), or
  • 100% of your compensation

For 2012, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced if your MAGI is:

  • More than $92,000 but less than $112,000 for a married couple filing a joint return or a qualifying widow(er),
  • More than $58,000 but less than $68,000 for a single individual or head of household, or
  • Less than $10,000 for a married individual filing a separate return.

For 2012, if you either live with your spouse or file a joint return, and your spouse is covered by a retirement plan at work, but you are not, your deduction is phased out if your modified AGI is more than $173,000 but less than $183,000. If your modified AGI is $183,001 or more, you cannot take a deduction for contributions to a traditional IRA.

Am I considered an active participant?

Generally, you are considered an active participant in an employer's retirement plan if, for the given year, your account balance (in your employer's retirement plan) has received any contributions or has had any forfeitures allocated to it. Employers must indicate if someone is an active participant on the person's Form W-2. Therefore, one easy way to find out if you are considered an active participant is to refer to your W-2 form. If you are still unsure about whether you are considered an active participant, check with your employer.

How do I determine my MAGI?

Simply stated, MAGI is your adjusted gross income (AGI) from your Form 1040 or 1040A determined before any adjustments are made for IRA deductions, foreign earned income exclusions or foreign housing exclusions.

Why should I make IRA contributions if they're not deductible?

Many people still make IRA contributions even if they don't qualify for an IRA deduction. These contributions, referred to as nondeductible IRA contributions, still have many advantages which help individuals save for a financially secure retirement.

One advantage of nondeductible IRA contributions is that the earnings are tax-deferred. In other words, you don't pay taxes on the earnings until you withdraw them from your IRA. Further, by not deducting these contributions on your tax return, you pay taxes on nondeductible IRA contributions in the year the dollars are contributed. Therefore, you do not pay taxes on these amounts when you withdraw them from your IRA.

The need to save for a secure tomorrow, combined with the power of tax- deferred earnings, makes nondeductible IRA contributions a promising alternative for individuals no longer eligible for deductible IRA contributions.

The IRA Advantage

Regardless of whether you make deductible or nondeductible contributions, an IRA gives you the retirement advantage you are looking for. Why delay any longer?

 

Additional information on IRAs is available at your local BancorpSouth branch or by visiting irs.gov.  

 

Regulation E Disclosure

 

VerisignEqual Housing LenderMember FDIC
Insurance and Investment products are:
Not a Deposit – No Bank Guarantee – Not insured by FDIC or other Government Agency
Not a Condition of any Bank Loan, Product or Service
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MUTUAL FUND FEES AND ADDITIONAL COMPENSATION

Mutual funds are subject to various fees, charges and other expenses, including investment management fees and various distributionrelated fees (including 12b-1 fees), transfer agency fees and other administrative service fees. The current prospectus for the applicable mutual fund contains more detailed information concerning the fund and its objectives, risks, fees and charges. A copy of the current prospectus may be obtained by contacting your Account Administrator.

BancorpSouth Asset Management & Trust receives fees or other compensation ("Fund Compensation") when your account's assets are invested in certain mutual funds, including money market mutual funds. Some Fund Compensation is paid to us from the assets of the funds ("Fund-Paid Compensation") and impacts your investment return. In other instances, Fund Compensation is paid out of the assets of the fund's manager/sponsor ("Manager-Paid Compensation") and does not impact your investment return. Generally, Fund Compensation is paid to us at least quarterly and is based on a percentage of the average daily net assets of your account invested in the fund. The Fund Compensation we receive is in addition to our normal asset-based fees and other fees and the value of your account's assets will be included in calculating our normal asset-based fees and applicable Fund Compensation.

Trading Platform. If you direct the investment of your account, you have access to a wide variety of mutual funds on our BancorpSouth Asset Management Trading Platform. Many of the mutual funds available on the Trading Platform pay us Fund-Paid Compensation for sub-transfer agency and related services, which fees typically range from 0.10% - 0.15% annually. In addition, certain funds available on the Trading Platform pay us Fund-Paid Compensation in the form of 12b-1 fees for various administration and customer servicing relating to the fund's shares held by your account, which fees typically range from 0.00% to 0.25% annually.

Asset Allocation Models. Currently, we receive Fund-Paid Compensation only in the form of sub-transfer agency fees (for services related to buying, selling, and holding fund shares) from some mutual funds (including money market funds) that are used in our Asset Allocation Models. The sub-transfer agency fees we receive range from 0.00% to 0.15%. The amount of Fund Compensation we receive will vary from fund to fund and may not apply in the case of some funds. Our investment process is designed to pick funds for the Asset Allocation Models without regard to whether a fund pays us Fund Compensation and without regard to the amount of such compensation.

Money Market Mutual Funds. Your account's short-term balances are invested in money market mutual funds sponsored/managed by Federated Securities Corp. ("Federated Money Funds") or money market mutual funds sponsored/managed by Goldman Sachs Asset Management, L.P. ("Goldman Money Funds"). As of March 1, 2011, we receive Manager-Paid Compensation from Federated Securities Corp. or its affiliates of up to 0.05% of the average net assets invested in Federated Money Funds and from Goldman Sachs Asset Management or one of its affiliates of up to 0.06% of the average net assets invested in the Goldman Money Funds. The level of Manager-Paid Compensation will vary from time to time.

For additional information, please contact your Account Administrator.