If you're still working, you can contribute the full amount of your salary deferral to a Roth 401 (k), regardless of your age. For starters, custodians holding IRAs aren't required to accept contributions from savers over 70 and a half years old, according to new guidance from the IRS. Those who do so must modify their IRA contracts. Customers who are still working after age 70 and a half can generally continue to contribute to employer-sponsored 401 (k) accounts, SEP IRAs, and even Gold IRA kits.
In fact, employers must continue to make employer contributions to the SEP IRA of an employee over 70 and a half years old if they make similar contributions to the accounts of younger employees. Direct contributions to a traditional IRA are not allowed after the client turns 70 and a half years old, although the client can transfer funds from another type of retirement account to their traditional IRA. However, the total contributions you make each year cannot exceed your compensation for working for the company. That is, the Security Act now allows people over 70 and a half years old to make tax-deductible contributions to an IRA.
In other words, if you're still an employer with an individual 401 (k) retirement plan, you can continue to make contributions to your individual 401k or employer-sponsored SEP IRA. There are no joint IRAs, so one spouse can make a deductible contribution to their own account, while the other makes a charitable distribution, Slott said. If you continue to work, you can avoid the required minimum distributions and continue to make contributions to your 401 (k) or SEP IRA account sponsored by your employer. In this case, they make non-deductible contributions to the IRA and then convert those sums into a Roth IRA, Slott said.
In some cases, you can contribute additional amounts to other types of plans; these may include a 457 plan, a Roth IRA, or a traditional IRA. The rules for contributing to an IRA after 70 and a half years depend on whether the account is a traditional IRA, a Roth IRA, or an SEP IRA. This means that while you can continue to contribute to your Roth IRA if you're below income limits, if you exceed those limits you can't do a clandestine Roth after age 70 and a half. If you want to save in your 70s, it would be best to avoid those tax-deductible IRA contributions altogether, Slott said.
People who are committed to making those tax-deductible contributions to the IRA and want to continue donating to charities through charitable distributions can also contact their spouse. In addition, contributing to an IRA at this age can have unexpected planning implications, such as changing your charitable giving strategy.