Can you contribute to a retirement account after age 70?

Jeffrey Levine, an expert in tax and financial planning, described traditional IRA contributions after the RMD era as something like a revolving door of IRA money. Just as you can only contribute to your IRA until you reach a certain age, most IRAs impose the required minimum distributions (RMDs) once you turn 70.5 or 72, depending on your date of birth. Under the new SECURE Act, if you have earned income, there is no age limit for contributing to a traditional IRA (previously, you had to stop doing so the year you were 70 and a half years old). You can continue to contribute indefinitely, and because Roth IRAs are not subject to RMDs, your savings can accumulate tax-free for longer.

Nor is there any age restriction if you are setting up a new IRA to which you will transfer or transfer assets from another IRA or from an eligible retirement plan, such as an employer-sponsored plan, such as a 401 (k). However, such a maneuver will entail tax costs in the (probable) scenario where a retiree has significant traditional IRA assets that have not yet been taxed. As you might have guessed, Roth IRAs are the only accounts that don't require minimum distributions at any age. But if you can make a contribution to the IRA, should you? Or would it be better if you saved in a taxable account? You should start withdrawing the required minimum distribution (RMD) from your tax-deferred retirement accounts, such as a traditional IRA or 401 (k) plan, when you turn 72.In addition, traditional IRA investments benefit even less from that tax-protected capitalization than contributions to Roth IRAs, since traditional IRAs are subject to RMDs that are ultimately subject to taxation.

A traditional IRA allows investors to make contributions, and you receive a tax deduction equal to the amount of the contribution in the tax year in which you made it. A Roth IRA might be better than a traditional IRA for people who want to save on taxes in retirement when they expect to earn more later than they do now. Roth IRAs have no age limits for contributions, and workers can also contribute to their company's retirement plans (such as 401 (k) plans) and delay the RMDs of those accounts, as long as they are still employed and are not the primary owners of the company. Leveraging IRAs to save later in life has tax benefits and will often be preferable to investing in a taxable brokerage account for older adults with earned incomes, but those tax benefits will tend to be modest.

In addition, income limits don't apply to contributions to a company's retirement plans, unlike IRAs.

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