Ask the Expert: No age limit for Roth IRA

You can't be too old (or too young)

You can't be too old (or too young) to contribute to a Roth IRA, but you must have earned income in the contribution year. (Credit: Photos.com)

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In your May 19 column about IRA contribution rules, you didn't mention whether people past the age of 70 can open a Roth IRA. Can they?

 

They can if they meet income requirements. Roth IRAs have no age limit.

I didn't discuss Roth IRAs in that column because it addressed a question from someone who wanted to defer taxes on his income. Contributing to a Roth IRA won't reduce your tax bill. But it's a great way to save tax-free, and lets you leave a tax-free legacy for your children or grandchildren.

All your earnings in a Roth IRA -- interest, dividends and capital gains -- can be withdrawn tax-free after you're older than 591/2 and have owned the account for five years. But you're never required to take distributions, regardless of your age. If you leave your Roth IRA to your heirs, their withdrawals from the account also are tax-free. (But unlike the original owner, a Roth IRA beneficiary is required to take minimum annual distributions from the account.)

You can't be too old (or too young) to contribute to a Roth IRA, but you must have earned income in the contribution year. If you're older than 50, the maximum 2012 Roth contribution is $6,000. You can contribute that much if you're single and your 2012 modified adjusted gross income is less than $110,000, or married filing jointly and your 2012 income is less than $173,000. You can make smaller 2012 Roth IRA contributions if you're single with income between $110,000 and $125,000 or married filing jointly with income between $173,000 and $183,000. (These limits don't apply when you convert a traditional IRA to a Roth IRA.)

The bottom line You must have earned income to contribute to a Roth IRA, but there's no age limit.

Websites with more information 1.usa.gov/KIWjGy and 1.usa.gov/KdnXz1

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