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Important information concerning the Fidelity Advisor IRAs (Traditional, Roth, SEP/SARSEP, and SIMPLE)
Annual Traditional and Roth IRA Contribution Limits, including Catch-up Contributions
Traditional IRA and Roth IRA owners are generally permitted to make contributions up to an annual limit. Owners who are at least age 50 by December 31 of the tax year to which the contribution applies are generally permitted to make an additional "catch-up" contribution up to an annual limit. The maximum aggregate annual contribution limits for Traditional and Roth IRA contributions are detailed in table shown.
Tax Year Annual Traditional and Roth IRA contribution limit $6,500 Annual Traditional and Roth IRA catch-up1 contribution limit2 $1,000 Maximum annual contribution limit (including catch-up)1 $7,500
SIMPLE IRA Elective Deferral and Catch-up Elective Deferral Contributions
SIMPLE IRA plan participants are permitted to make an elective deferral contribution up to an annual limit. Plan participants who are at least age 50 by December 31 of the tax year to which the contribution applies are permitted to make an additional elective deferral catch-up contribution up to an annual limit. Elective deferral contributions and catch-up contributions may be matched by the employer up to 3% of compensation (subject to plan provisions). The annual SIMPLE IRA catch-up contribution limit is $3,500 for tax year . This amount is subject to increase for cost-of-living adjustments in later years. See table.
Tax Year Annual SIMPLE IRA elective deferral limit $15,500* SIMPLE IRA catch-up1 elective deferral limit2 $3,500 Maximum annual elective deferral limit (including catch-up)1 $19,000*
The maximum compensation on which nonelective contributions to a SIMPLE IRA can be based is $305,000 for . The maximum compensation figure is subject to cost-of-living adjustments in $6,600 increments in later years.
Contribution limits for SEPs and SARSEPs
The annual contribution limit to a SEP or SARSEPs is the lesser of 25% of compensation or $67,000 (per participant) for . This limit is subject to cost-of-living adjustments in $6,600 increments in later years. The maximum compensation on which contributions to SEPs and SARSEPs can be based is $335,000 in and is subject to cost-of-living adjustments in $6,600 increments in later years. Elective deferrals to SARSEPs are also subject to the limits more fully described below.
SARSEP Elective Deferral and Catch-Up Contributions
The maximum annual elective deferral limit for a SARSEPs IRA for is the lesser of 25% of compensation or $22,500. The $22,500 limit applies to the total elective deferrals (including designated Roth contributions, if applicable) made to a SEP, a 401(k) plan, a 403(b) plan, and a SIMPLE IRA. The $22,500 limit is subject to cost-of-living adjustments in increments of $6,600 in later years. Additionally, SARSEPs IRA participants who reach age 50 by December 31 of the tax year to which the contribution relates are eligible to contribute an additional catch-up contribution. See table.
Tax Year Annual SARSEPs IRA elective deferral limit $22,500* SARSEP IRA catch-up1 elective deferral limit2 $6,500 Maximum annual elective deferral limit (including catch-up)1 $29,000*
Expansion of Rollover Rules
Eligible rollover distributions from 401(a), 403(b), and 457 governmental plans may generally be rolled over to an IRA or any of such plans or arrangements that permit rollovers. After-tax contributions may not, however, be rolled over from an IRA to a 401(a), 403(b) or 457 governmental plan. As a result of the Pension Protection Act of 2006, after-tax amounts in 401(a) plans, including designated Roth contributions, may be rolled over to 403(b) plans and vice versa.
Required Minimum Distribution Rules
Required Minimum Distributions (RMDs) are generally required for IRA owners who have attained a specific age. The beginning RMD age is 73 for individuals who reach the age of 73 on or after January 1, 2023. For individuals who have reached age 72 in 2022, the RMD remains at 72. The regulations also require that the trustee, custodian, or issuer of an IRA must provide a statement to the IRA owner by January 31 of the calendar year regarding the RMD.
The statement must also inform the IRA owner that the trustee, custodian, or issuer of the IRA will be reporting to the IRS that the IRA owner is required to receive an RMD for the calendar year. FIIOC will satisfy the IRS RMD reporting requirement by notifying all Fidelity Advisor IRA owners who are or will be at least age 73 by December 31, , that they are required to take an RMD from any IRA that they own, including IRAs held at other trustees, custodians, or IRA issuers. FIIOC will also offer to calculate the RMD if instructed to do so by the Fidelity Advisor IRA owner. This notification, via mail, will occur on or before January 31, .3
In addition to the notification above, if Box 11 of Form 5498 is checked, you must take an RMD for . An RMD may be required even if the box is not checked. If you don't take the RMD in (or if it is your first RMD, by April 1, ), you will usually be subject to a 25% excise tax on the amount not distributed.
You may request that Fidelity calculate and distribute the RMD amount for you.
For more information, refer to the Frequently Asked Questions about RMDs on the IRS Website at www.irs.gov or contact your investment professional or tax advisor.
For additional information on the legislative provisions affecting your IRA, please call your financial or tax advisor. You should review these changes carefully. As always, you are encouraged to consult your financial or tax advisor with respect to any tax questions, or to determine how these changes may affect your personal situation.
* Subject to cost-of-living adjustments.
- Catch-up contributions are applicable only to IRA owners or plan participants who are or will be at least age 50 in the tax year to which the contribution/elective deferral relates.
- Note that in certain cases, additional requirements may have to be satisfied in order to be eligible to contribute up to the limits.
- Owners of IRA Beneficiary Distribution Accounts (BDA) are not subject to these IRS RMD reporting requirements and will not receive a statement. They should consult a tax advisor for their RMD requirements. Under PPA, special MRD rules apply to a nonspouse beneficiary who has rolled over inherited plan assets to an inherited IRA.
- For additional information on the legislative provisions affecting your IRA, please call your financial or tax advisor. You should review these changes carefully. As always, you are encouraged to consult your financial or tax advisor with respect to any tax questions or to determine how these changes may affect your personal situation.
- *For tax purposes, your cost basis (plus or minus certain adjustments) is used to determine the gain or loss of a transaction. The information that Fidelity is required to report on your 1099-B may not reflect additional adjustments that you are required to make when filing your tax return.
- The tax information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. Fidelity does not provide legal or tax advice.