Financial Advice Q&A

New Member
Posts: 1
I'll be 70 1/2 can I contribute to an IRA?
[ Edited ]

I turn 70 in December 2013, does that mean that I can no longer contribute to an IRA in 2014? If I continue to work full time can I continue to contribute to my employer 401K in 2014?

Posted: 2013-12-18 06:05 AM
Other Answers: 1
Community Manager
Posts: 398

You've got options. Although hitting age 70 1/2 in 2014 will limit your choices a bit starting next year, there are still several retirement savings vehicles you could use given your situation. Let's take a look.



Traditional IRA contributions cannot be made if you reach age 70 1/2 by the end of the year. Therefore, if you choose to, you'll be able to make a 2013 contribution to a traditional IRA, but won't be able to make contributions to this type of account in future years. In fact, next year you'll be requred to make your first mandatory distribution (RMD) from your traditional IRA. While you can choose to delay up until April 1, 2015, your days of adding to the traditional IRA will be over and the IRS is going to require you to start withdrawing funds.


However, Roth IRAs are not subject to RMD rules and do not have an age limitation. So, as long as you keep working, have taxable compensation of at least as much as you want to contribute to the Roth IRA and meet the income limits to be eligible you could make a Roth IRA contribution. In 2014, your MAGI must be less than $129,000 ($191,000 filing jointly) to make any contribution to a Roth and under $114,000 ($181,000) to make a full contribution.  All the rules surrounding IRAs are covered in detail in IRS Publication 590.



Here's some good news. Yes, you can continue to contribute to your 401(k) for as long as you are working. Additionally, you do not have to begin your RMD until the later of the calendar year in which you turn 70 1/2 or retire.  So, the 401(k) will continue to be a nice way to put away some money.


Hope this was helpful.




Posted: 2013-12-19 07:25 AM


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