Fidelity's Open Requirements for Roth IRAs
Fidelity is a brokerage investment firm offering traditional and Roth IRA options. Fidelity is required to follow all Internal Revenue Service regulations regarding the opening and maintenance of IRAs. Fidelity has additional requirements that fall within the IRS guidelines regarding minimum account requirements.
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IRS Maximum Contributions
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The Internal Revenue Service has maximum Roth IRA annual contributions. The 2011 IRS contribution limit is $5,000 unless you are age 50 or older. Those 50 or older can make catch-up contributions of an additional $1,000, for a total maximum annual contribution of $6,000. Fidelity has no ability to alter the maximum contribution.
Fidelity Minimum Account Requirements
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The IRS has no minimum annual contribution requirement, however, Fidelity has a minimum account opening requirement. Before you can invest in Fidelity mutual funds, you must have at least $2,500 to invest. You can still open a Fidelity Roth IRA with less, holding the contributions in a money market fund until you have enough for the minimum mutual fund investment. Another option is to set up an automatic investment where $200 every month is automatically transferred from your bank account into the Roth IRA.
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Earned Income Contribution
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The IRS requires all Roth IRA contributors to have earned income that equals or exceeds the amount contributed. But the IRS doesn't mandate that contributions automatically come from salary deductions. Since the contributions can come from earnings, other investments or even gifts, Fidelity has no requirements to verify the income contributors have. It is the Roth IRA owner's responsibility to confirm that there is enough wage income to meet the amount contributed. The IRA owner is responsible for penalties on excess contributions; in 2011, penalties are 6 percent per year on the excess amount assessed by the IRS.
Income Limits
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The IRS has income limits determining if you qualify for a Roth IRA contribution. Fidelity does not mandate this and it is the IRA owner's responsibility to consult with a tax adviser before making contributions. The 2011 IRS income limits state that single tax filers must make less than $107,000 to make a full Roth contributions with partial contributions allowed with income up to $122,000. A married couple filing joint tax returns can make full contributions up to $169,000 and can make partial contributions up to $179,000. The income limits are based on your modified adjusted gross income.
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