New Client Alert Explains IRA and Retirement Plan Limits for 2013 - October 22, 2012

IRA contribution limits

The maximum amount you can contribute to a traditional IRA or Roth IRA in 2013 increases to $5,500 (or 100% of your earned income, if less), up from $5,000 in 2012. The maximum catch-up contribution for those age 50 or older remains at $1,000. (You can contribute to both a traditional and Roth IRA in 2013, but your total contributions can't exceed this annual limit.)

Traditional IRA deduction limits for 2013

The income limits for determining the deductibility of traditional IRA contributions have also increased for 2013 (for those covered by employer retirement plans). For example, you can fully deduct your IRA contribution if your filing status is single/head of household, and your income ("modified adjusted gross income," or MAGI) is $59,000 or less (up from $58,000 in 2012). If you're married and filing a joint return, you can fully deduct your IRA contribution if your MAGI is $95,000 or less (up from $92,000 in 2012). If you're not covered by an employer plan but your spouse is, and you file a joint return, you can fully deduct your IRA contribution if your MAGI is $178,000 or less (up from $173,000 in 2012).

If your 2013 federal income tax filing status is:	Your IRA deduction is reduced if your MAGI is between:	Your deduction is eliminated if your MAGI is:
Single or head of household	$59,000 and $69,000	$69,000 or more
Married filing jointly or qualifying widow(er)*	$95,000 and $115,000 (combined)	$115,000 or more (combined)
Married filing separately	$0 and $10,000	$10,000 or more

*If you're not covered by an employer plan but your spouse is, your deduction is limited if your MAGI is $178,000 to $188,000, and eliminated if your MAGI exceeds $188,000.

Roth IRA contribution limits for 2013

The income limits for determining how much you can contribute to a Roth IRA have also increased. If your filing status is single/head of household, you can contribute the full $5,500 to a Roth IRA in 2013 if your MAGI is $112,000 or less (up from $110,000 in 2012). And if you're married and filing a joint return, you can make a full contribution if your MAGI is $178,000 or less (up from $173,000 in 2012). (Again, contributions can't exceed 100% of your earned income.)

If your 2013 federal income tax filing status is:	Your Roth IRA contribution is reduced if your MAGI is:	You cannot contribute to a Roth IRA if your MAGI is:
Single or head of household	More than $112,000 but less than $127,000	$127,000 or more
Married filing jointly or qualifying widow(er)	More than $178,000 but less than $188,000 (combined)	$188,000 or more (combined)
Married filing separately	More than $0 but less than $10,000	$10,000 or more

Employer retirement plans

The maximum amount you can contribute (your "elective deferrals") to a 401(k) plan has increased for 2013. The limit (which also applies to 403(b), 457(b), and SAR-SEP plans, as well as the Federal Thrift Plan) is $17,500 in 2013 (up from $17,000 in 2012). If you're age 50 or older, you can also make catch-up contributions of up to $5,500 to these plans in 2013 (unchanged from 2012). (Special catch-up limits apply to certain participants in 403(b) and 457(b) plans.)

If you participate in more than one retirement plan, your total elective deferrals can't exceed the annual limit ($17,500 in 2013 plus any applicable catch-up contribution). Deferrals to 401(k) plans, 403(b) plans, SIMPLE plans, and SAR-SEPs are included in this limit, but deferrals to Section 457(b) plans are not. For example, if you participate in both a 403(b) plan and a 457(b) plan, you can defer the full dollar limit to each plan--a total of $35,000 in 2013 (plus any catch-up contributions).

The amount you can contribute to a SIMPLE IRA or SIMPLE 401(k) plan has increased to $12,000 for 2013, up from $11,500 in 2012. The catch-up limit for those age 50 or older remains unchanged at $2,500.

Plan type:	Annual dollar limit:	Catch-up limit:
401(k), 403(b), governmental 457(b), SAR-SEP, Federal Thrift Plan	$17,500	$5,500
SIMPLE plans	$12,000	$2,500

Note: Contributions can't exceed 100% of your income.

The maximum amount that can be allocated to your account in a defined contribution plan (for example, a 401(k) plan or profit-sharing plan) in 2013 is $51,000 (up from $50,000 in 2012), plus age-50 catch-up contributions. (This includes both your contributions and your employer's contributions. Special rules apply if your employer sponsors more than one retirement plan.)

Finally, the maximum amount of compensation that can be taken into account in determining benefits for most plans has increased to $255,000, up from $250,000 in 2012; and the dollar threshold for determining highly compensated employees remains unchanged at $115,000.

Week in Review: U.S. markets have strong first quarter amid global uncertainty

Global economic news

U.S. economy creates 216,000 jobs; unemployment rate dips to 8.8%In a sign that the U.S. labor market may be strengthening, the nation’s companies added 216,000 jobs in March, more than the 190,000 gain projected by a number of leading economists. The U.S. Department of Labor reported that the jobless rate fell again in March to a two-year low of 8.8%. The government’s jobs creation figure is even higher than the 201,000 jobs ADP Employer Services estimated were added to U.S. payrolls last month.

Home prices in U.S. drop again in JanuaryThe average price of single-family homes in 20 major U.S. metropolitan areas fell 3.1% from a year ago, according to the Standard & Poor’s/Case-Shiller Home Price Index. January is the sixth month in a row that U.S. home prices have fallen. Eighteen of the twenty markets covered by the survey recorded year-over-year price declines.

Consumer spending in U.S. rises in FebruaryU.S. consumer spending jumped 0.7% in February, the eighth-straight month of increases. In addition, the U.S. Department of Commerce said that personal incomes rose 0.3% for the month. Still, higher consumer prices absorbed a significant portion of the spending increase. After inflation, the increase was a more modest 0.3%.

U.S. Treasury recoups TARP fundsThe U.S. Department of the Treasury reported that money it loaned to banks during the financial crisis has been paid back. The federal bailout and its Troubled Asset Relief Program (TARP) is currently $6 billion in the black. Still, according to published reports, Treasury Secretary Timothy Geithner admitted that the federal government has “more work to do repairing the damage caused by the crisis and strengthening the recovery, but today is an important milestone in our efforts to recover taxpayer dollars as we continue winding down TARP.”

Confidence of U.S. consumers falls from three-year highThe Conference Board’s Consumer Confidence Index fell more than anticipated to 63.4 in March from a revised 72.0 in February. The sharp decline in confidence was driven by a number of global and economic factors, including rising gas and oil prices, the Japan crisis, and ongoing unrest in the Middle East.

America’s CEOs report encouraging outlook for sales, jobsThe Business Roundtable, an association of CEOs at the largest U.S. companies, reported in its first-quarter survey that nearly all its members expect sales to increase over the next six months. More than 60% expect additional investment in their businesses, and over half plan to hire more workers in the next two quarters.

U.S. businesses expand at a faster-than-expected paceThe Institute for Supply Management said its business barometer slipped to 70.6 in March from a reading of 71.2 in February. The index surpassed the 69.6 median projected by economists surveyed by Bloomberg News. An index reading greater than 50 indicates business expansion.

S&P downgrades Greece, PortugalRatings agency Standard & Poor’s lowered its rating of Greek sovereign debt two notches to “BB-” from “BB+,” dropping the country’s debt further into junk territory. S&P also cut Portugal’s senior debt rating by one notch to “BBB-” from “BBB.” The most recent cut follows last week’s two-notch downgrade of Portugal, which is now close to losing its investment-grade status for the first time. The outlook for both countries’ ratings remains negative, according to S&P. Greece has already accepted a three-year plan of emergency help from the European Union and International Monetary Fund. Standard & Poor’s expects Portugal to ask the IMF and the European Financial Stability Facility for a similar bailout package.

Irish banks need additional €24 billionA plan to nationalize Ireland’s banking sector may be imminent after a third round of stress tests revealed that the country’s banks will need an additional capital influx of €24 billion. The stress tests are a condition of the bailout the Irish government agreed to with the European Union and International Monetary Fund in November. With the latest bailout, the total cost of the bank rescue is approximately €70 billion. Ireland’s government also announced plans for an overhaul of the country’s banking system aimed at restoring investor confidence.

Eurozone confidence slips in MarchAn index of executive and consumer sentiment in the 17-nation euro region fell slightly to 107.3 in March from a revised 107.9 in February, the European Commission said. The drop in the confidence measure was larger than economists had forecast, as rising oil prices, Middle East unrest, and Japan’s earthquake resulted in rising pessimism for global growth prospects. February’s reading was the highest for the index since August 2007.

German unemployment falls to lowest level since 1992The number of Germans who were out of work dropped a seasonally adjusted 55,000 to 3.01 million, according to the Nuremberg-based Federal Labor Agency. That is the lowest level since June 1992. Germany’s unemployment rate fell to 7.1% in March from 7.3% the month before.

Global corporate news

Fujitsu says impact of Japan’s earthquake to be in “billions of yen”Following the country’s March 11 earthquake and tsunami, Japanese electronics conglomerate Fujitsu will have to revise its earnings forecasts for the fiscal year ending this month. Fujitsu’s president said the quake’s impact on earnings “will likely exceed several billions of yen.” Fujitsu, which has resumed most of its operations in the quake-hit region, is among several major Japanese companies affected by one of the largest natural disasters in the country’s history.

Harry & David to file for bankruptcy protectionHarry & David announced it is preparing to file for Chapter 11 bankruptcy protection. In a “prearranged” deal with creditors, the specialty gourmet fruit retailer will convert its bond debt to equity and seek to raise additional capital through a new stock sale. The company has been struggling as consumers cut back in the weak economy. In January, the 75-year-old retailer reported that revenue during the critical holiday quarter fell nearly 2%, and last month the company cut approximately 100 jobs.

EBay to buy GSI Commerce for $2.4 billionEBay agreed to purchase e-commerce company GSI Commerce for $2.4 billion, extending eBay’s reach into Internet retailing and intensifying the company’s rivalry with Amazon. GSI’s core business is providing e-commerce infrastructure — e-store technology, payment processing, fulfillment, marketing, and customer service — for more than 180 top brands and retailers.

GE to purchase stake in ConverteamGeneral Electric agreed to pay $3.2 billion in cash for a controlling stake inConverteam, the power conversion company. The acquisition of the French company, which serves a variety of industries including oil and gas companies, is the latest in a string of deals totaling $11 billion over the past six months aimed at expanding GE’s energy business. They have also acquired Dresser Inc., Wellstream Holdings, Lineage Power Holdings, and John Wood Group’s well support division.

Qihoo goes publicChinese Internet company Qihoo 360 went public this week on the New York Stock Exchange, and the company’s shares immediately doubled at the start of trading. The Internet software company, which sells antivirus software and security services, raised more than $175 million in its IPO. Qihoo also makes the second-most-used Internet browser in China, behind Microsoft’s Internet Explorer.

Galaxy reports profit dropGalaxy Entertainment Group said its net profit fell 22% last year in part because of one-time accounting and valuation adjustments. The casino operator, controlled by the family of tycoon Lui Che Woo, reported that net profit totaled HK$898.46 million last year, down from HK$1.15 billion in 2009. Galaxy is moving ahead with plans to open a HK$14.9 billion casino-resort in Macau’s lucrative Cotai area.

The week ahead

• Institute for Supply Management’s Services Index data released Tuesday, April 5
• China’s Consumer Price Index released Wednesday, April 6
• U.S. initial jobless claims data released Thursday, April 7
• U.S. consumer credit data released Thursday, April 7
• Bank of England announcement due Thursday, April 7
• Canada’s Labour Force Survey results due Friday, April 8

Stay focused and diversified
In any market environment, we strongly believe that investors should stay diversified across a variety of asset classes. By working closely with your financial advisor, you can help ensure that your portfolio is properly diversified and that your financial plan supports your long-term goals, time horizon, and tolerance for risk. Diversification does not guarantee a profit or protect against loss.

The information included above as well as individual companies and/or securities mentioned should not be construed as investment advice, a recommendation to buy or sell, or an indication of trading intent on behalf of any MFS product.

Securities discussed may or may not be holdings in any of the MFS funds. For a complete list of holdings for any MFS portfolio, please see the most recent annual, semiannual, or quarterly report. Full holdings are also available on the individual Fund Profile tab in the Products and Performance section of mfs.com.

Past performance is no guarantee of future results.

Sources: MFS research; The Wall Street Journal; The Wall Street Journal Online; Bloomberg News;Financial Times; Forbes.com; CNNMoney.com; msnbc.com.

--see disclaimer below--

Week in Review: Stocks rally after Fed announces it will pump $600 billion into U.S. economy

U.S. economic news

Fed details more quantitative easing plans
On Wednesday, the Fed announced that it would purchase an additional $600 billion of longer-term Treasury securities by June in a second round of quantitative easing. The central bank said it would also keep reinvesting principal payments from its securities holdings. Demand for Treasuries jumped on the news and pushed the yield of the two-year and five-year notes down to record lows.


Employment rises more than expected
Employment rose more than expected in October, bolstering optimism about the economic recovery. Payrolls climbed by 151,000 jobs, and the jobless rate held at 9.6%. The report also showed gains in hours worked and earnings. Average hourly earnings increased 1.7% in October from the same month last year. The numbers brought increased optimism that improvement in the labor market will boost household spending.


Data show uneven recovery
Other economic news from October continued to point to an uneven recovery. The Institute for Supply Management reported that manufacturing and service sector activity picked up. U.S. productivity exceeded expectations and rose at a 1.9% annual rate in the third quarter. U.S. retailers posted mixed results, with luxury apparel faring well.

U.S. and global corporate news

EPS top estimates at 77% of companies
Earnings per share have topped estimates at about 77% of the companies in the Standard & Poor's 500 Stock Index reporting since October 7, according to data compiled by Bloomberg. Net income has increased 32% for the group amid 9.8% growth in sales.


BNP posts 46% profit increase
BNP Paribas reported a 46% increase in third-quarter profits amid strong growth in its consumer banking networks.


American International Group posted a $2.4 billion net loss for the third quarter because of various restructuring charges totaling $4.5 billion. Its main insurance business, however, improved from a year ago.


Toyota Motor posted a lower-than-expected increase in fiscal second-quarter profit but raised its full-year outlook as operating income gains in Asia offset continued losses in Europe and Japan. Nissan Motor and
Honda Motor also raised their full-year earnings forecasts this week but warned that the yen's rapid rise against other currencies was an ongoing risk to the bottom line.

Global economic news

ECB, BOE, BOJ hold rates steady
The European Central Bank kept interest rates at a record low of 1% for the nineteenth month, and the Bank of England left its key rate at 0.5% and maintained its asset purchase program at £200 billion. The Bank of Japan kept interest rates at ultra low levels and finalized its plan to buy exchange-traded funds and real estate investment trusts in a ¥5 trillion asset program that it first announced last month.


Australia and India increase rates
Central banks in Australia and India raised rates to stem inflation pressures. China also signaled that an increase may be imminent.

Stay focused and diversified
In any market environment, we strongly believe that investors should stay diversified across a variety of asset classes. By working closely with your financial advisor, you can help ensure that your portfolio is properly diversified and that your financial plan supports your long-term goals, time horizon, and tolerance for risk.

Diversification does not guarantee a profit or protect against loss.

The information included above as well as individual companies and/or securities mentioned should not be construed as investment advice, a recommendation to buy or sell, or an indication of trading intent on behalf of any MFS product.

Securities discussed may or may not be holdings in any of the MFS funds. For a complete list of holdings for any MFS portfolio, please see the most recent annual, semiannual, or quarterly report. Full holdings are also available on the individual Fund Profile tab in the Products and Performance section of mfs.com.

Past performance is no guarantee of future results.

Standard & Poor's 500 Stock Index measures the broad U.S. stock market. It is not possible to invest directly in an index.


Sources: MFS research; The Wall Street Journal; The Wall Street Journal Online; Bloomberg News; Financial Times; Forbes.com; CNNMoney.com; msnbc.com

Week in Review: Strong earnings, job numbers unable to allay investor concerns

U.S. economic news

Fed may take more "measured approach" with additional economic stimulus
The U.S. Federal Reserve Board's long awaited quantitative easing policy will most likely be announced following its next policy meeting on November 3. The Wall Street Journal noted this week that the Fed is likely to buy "a few hundred billion" dollars in U.S. Treasury bonds over a period of "several months" to pressure interest rates and stimulate the economy. This amount is well below the $500 billion to $2 trillion figures that have been projected by some analysts and industry experts.


Jobless claims drop to three-month low
The U.S. Department of Labor reported this week that initial unemployment claims unexpectedly fell by 21,000 to 434,000 in the week ended October 23. This was the second weekly drop in the number of new unemployment applicants in the past two weeks. Some economists believe that the latest figures could be an indication that the job market is finally stabilizing.


New home sales climb in September
The U.S. Department of Commerce said that the number of new home sales in September grew 6.6% from August to a seasonally adjusted annual level of 307,000 units. The jump in sales is potentially good news for the battered housing market, which saw sales throughout most of the summer that were the slowest on record since 1963.


Consumer confidence edges up
According to several leading economists, concerns about the job market appear to be keeping U.S. consumer sentiment largely in check. The Conference Board's Consumer Confidence Index increased only slightly to 50.2 in October from a revised 48.6 in September. September's reading was the lowest since February and down sharply from 53.2 in August. A reading of 90 indicates a healthy economy.


U.S. and global corporate news


Exxon Mobil, the largest U.S. oil company by market value, reported third-quarter earnings of $7.35 billion, up from $4.73 billion a year earlier. Strong refining margins, higher commodity prices, and a 20% jump in oil production all contributed to this 55% jump in net income, surpassing analyst projections.


Ford Motor posted record third-quarter earnings gains of 70%, with net income rising to $1.7 billion from $997 million a year ago. The automaker cited a strong product line, momentum in North America, and continued success at Ford Credit as some of the reasons for the company's dramatic turnaround. It was the sixth consecutive quarterly profit for the only U.S. carmaker who avoided a bankruptcy filing last year. Ford's previous best third-quarter earnings were $1.1 billion in 1997.


ArcelorMittal, the world's largest steelmaker, said net profit for the three months ended September 30 was $1.35 billion compared with $910 million for the same period a year earlier. Despite a 48% increase in profits, the Luxembourg-based company cautioned that the remainder of 2010 will likely be difficult, and the firm forecasted lower prices and weak demand.


Procter & Gamble reported that its fiscal first-quarter earnings declined 6.8%, to $3.08 billion from $3.31 billion a year earlier, as higher commodity costs negatively impacted margins. Still, the latest profit figures for the world's largest consumer product company exceeded some analysts' estimates.

Global economic news

U.K.'s economy expands in third quarter
Britain's economy grew at a faster pace than projected during the third quarter, according to a preliminary estimate from the Office for National Statistics. Gross domestic product increased 0.8% between July and September from the second quarter. Most economists had projected growth of only 0.4% for the quarter, following the previous quarter's 1.2% growth rate. After the better-than-expected GDP figures were released, Standard & Poor's raised Britain's credit rating to stable from negative.


Bank of Japan revises growth forecast downward, holds interest rate steady
Japan's central bank said in its October outlook report that the country's economy will grow 2.1% in the year through March 2011 and 1.8% the following year. In July the bank had forecast growth of 2.6% and 1.9%, respectively. The bank, in a statement addressing its moderated forecast, cited declining demand in overseas markets such as the United States and China, the approaching end of government stimulus measures, and the strongly performing yen, which has risen to near historic levels against the dollar. In a separate move, the Bank of Japan voted to keep its key interest rate untouched at 0% to 0.1%.


German consumer confidence unchanged
GfK AG, the Nuremberg-based market research firm, said that its consumer sentiment index will remain at 4.9 in November, its highest level since May 2008. The figure is based on a survey of nearly 2,000 people. German unemployment declined for a fifteenth-straight month in October.


Switzerland consumer index falls to lowest level in six months
Switzerland's economic recovery may be stalling, at least according to one consumer indicator. UBS AG's index of consumption dropped to 1.7 in September from 1.95 in August. The latest figure is the lowest index reading since March. The consumer indicator is based on new car sales, retail sales, overnight hotel stays within the country by Swiss residents, consumer confidence, and UBS credit card transactions.

Stay focused and diversified
In any market environment, we strongly believe that investors should stay diversified across a variety of asset classes. By working closely with your financial advisor, you can help ensure that your portfolio is properly diversified and that your financial plan supports your long-term goals, time horizon, and tolerance for risk.

Diversification does not guarantee a profit or protect against loss.

The information included above as well as individual companies and/or securities mentioned should not be construed as investment advice, a recommendation to buy or sell, or an indication of trading intent on behalf of any MFS product.

Securities discussed may or may not be holdings in any of the MFS funds. For a complete list of holdings for any MFS portfolio, please see the most recent annual, semiannual, or quarterly report. Full holdings are also available on the individual Fund Profile tab in the Products and Performance section of mfs.com.

Past performance is no guarantee of future results.

Sources: MFS research; The Wall Street Journal; The Wall Street Journal Online; Bloomberg News; Financial Times; Forbes.com; CNNMoney.com; msnbc.com

Considerations in Claiming Social Security Retirement Benefits