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Traditional IRA

A Traditional Individual Retirement Account (IRA) is a personal savings plan that offers tax benefits to encourage retirement savings. In 2008 and 2009, you can contribute up to the lesser of $5,000 (or $10,000 if married filing a joint return) or 100 percent of your taxable compensation to a Traditional IRA.  In addition, individuals age 50 or older can make an extra "catch-up" contribution of up to $1,000. Funds in a traditional IRA grow tax-deferred until they are withdrawn. Contributions may be fully or partially tax-deductible, depending on certain factors.

Key Strengths:

  • Deductible contributions are made on a pretax basis
  • You can deduct the full amount of your contribution provided that you are not covered by an employer-sponsored retirement plan
  • Funds in Traditional IRAs grow tax deferred until they are withdrawn
  • IRAs offer a wide range of investment choices
  • $1,000,000 (and in some cases more) of IRA assets are protected in the event of bankruptcy under federal law

    Prerequisites:

  • You have not reached age 70½ during the year of the contribution
  • You have taxable compensation during the year
  • If you are covered by an employer-sponsored retirement plan, your IRA deduction (if any) depends on your modified adjusted gross income (MAGI) and your federal income tax filing status.

Taxation of Distributions

  • Generally, IRA distributions are taxed as ordinary income unless rolled over.
  • Distributions made before age 59½ may be subject to a 10% tax penalty. To learn how you can avoid this penalty, see the Morgan Keegan Substantially Equal Periodic Payments brochure.
  • Note: If the individual made non-deductible contributions to any Personal IRA, each distribution consists of a non-taxable portion and a taxable portion.

The Morgan Keegan IRA

Morgan Keegan offers a self-directed IRA program that provides you the flexibility to decide where your retirement funds are invested. Unlike the IRAs offered by other financial institutions like your local bank, the Morgan Keegan self-directed IRA offers a wide variety of investment choices including stocks, bonds, mutual funds, CDs and others. Your Morgan Keegan financial advisor can help you determine which investments are best suited to meet your retirement goals.

Contact Morgan Keegan today for more information about our Traditional IRAs.

All investment products including mutual funds involve risk. Principal value and investment return will fluctuate, so an investor's shares/units when redeemed may be worth more or less than the original amount. A complete explanation of risks, charges and expenses may be found in the prospectus. Investors should carefully read and understand the information contained in the prospectus before investing or sending money.