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Consider a simple, yet powerful, retirement product
Provides the potential for tax-advantaged growth and overall tax management.
Fidelity Advisor Traditional IRA Details
- Maximize contributions to their employer-sponsored retirement plans and want to save more
- Need a retirement plan for a nonworking spouse
- Do not have a workplace retirement plan
- No maximum age limit provided compensation requirements are met.
- For tax year 2023, if a client is covered by a plan at work, in order to take the full deduction the client must have a modified adjusted gross income (AGI) of less than $73,000 (single or head of household) or $116,000 (married filing a joint return). Partial deductibility AGI limits are less than $83,000 (single) and $136,000 (joint).
- Fidelity Advisor funds in multiple share classes
- Lesser of $6,500 or 100% of compensation; $7,500 if age 50 or older.1 Maximum contribution is reduced by any amount contributed to a Roth IRA for the same year.
- Spousal IRA for nonworking spouse: $6,500; $7,500 if spouse is age 50 or older1
- Deductibility of contributions depends on whether owner and/or spouse is an active participant in an employer-sponsored retirement plan, his or her filing status, and AGI
- Established and funded prior to the tax-filing deadline (no extensions) for contributions to be applied to the previous tax year
- Deductible contributions and any earnings are taxable as ordinary income in the year distributed
- Penalty-free distributions after age 59½
- 10% IRS early withdrawal penalty if taken before age 59½; however, a distribution may be penalty-free if taken for:
- qualified first-time home purchase ($10K lifetime limit)
- qualified higher education expenses
- certain unreimbursed medical expenses over 7.5% of AGI
- certain health insurance premiums if unemployed
- disability or death
- substantially equal periodic payments2
- Required minimum deductions (RMDs) beginning at age 72. The change in the RMD age requirement from 70½ to 72 only applies to individuals who turn 70½ on or after 1/1/20. Please speak with your tax advisor regarding the impact of the SECURE Act on future RMDs.
- Qualified charitable IRA distributions3
- Flexible distribution options for estate planning and tax management
- Contributions may be deductible from current income
- Contributory assets up to $1 million now may be protected from creditors4
- Earnings grow tax deferred
- 1. These amounts are subject to annual cost-of-living adjustments (COLA). Current information reflects 2023 COLA.
- 2. Substantially equal periodic payments must be made not less frequently than annually and for the life expectancy of the employee or the joint life expectancies of the employee and a designated beneficiary.
- 3. Qualified charitable distributions (QCD) may be made from an IRA (other than an active SEP or SIMPLE IRA), and excluded from income, after the IRA owner has reached age 70½, if directly transferred to a qualifying charitable organization, up to a maximum of $100,000. The amount of a QCD that is exempt from reporting will be offset by the total amount of IRA contributions made post age 70½. Please consult with your tax or legal adviser for more information on these distributions.
- 4. Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Please consult with legal counsel to determine how this law applies to your particular situation.
- 5. Distributions from a retirement account before you reach age 59½, (or distributions from a qualified plan, before you reach age 55 and are separated from service) may be subject to a 10% early withdrawal penalty under Internal Revenue Code Section 72(t) in addition to any applicable income taxes on the distributions.
- 6. Internal Revenue Code Section 72(t) provides several exceptions to the 10% penalty on early distributions; however, this piece focuses specifically on substantially equal periodic payments. Not all employer-sponsored retirement plans allow substantially equal periodic payments. Your client should check their plan's documents to confirm if these distributions are permissible and to determine the terms and conditions for such distributions. Remember, if your client does take these distributions, regular income taxes will apply.
- Depending on your firm’s policy, you can use the Fidelity Advisor IRA or invest in Fidelity Advisor Funds® through your platform.
- The above information is educational in nature and should not be construed as legal or tax advice.
- Before investing, have your client consider the funds’ investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Have your client read it carefully.