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Are IRA contributions allowed at 70 1⁄2?

My husband will turn 70 in 2018. He’s still working. I know he must take an RMD after age 70 12. Is he allowed to make a traditional IRA contribution for the year 2018?

It depends on his birthday month.

If his 70th birthday is after July 1, 2018, he can make an IRA contribution for 2018 because he won’t be 70 1⁄2 until 2019. But if his 70th birthday is before July 1, 2018, he’ll be 70 1⁄2 in 2018. In that case, 2017 is the last year for which he can contribute to a traditional IRA, says Ed Slott, a Rockville Centre tax accountant.

Your husband must take his first RMD no later than April 1 of the year after turning 70 1⁄2. All subsequent annual RMDs must be taken by Dec. 31. Why the different deadline for the first Required Minimum Distribution, known as RMD? “Congress figured people might forget when to take the first one, so they provided a three-month grace period,” Slott says.

Depending on his income, he can keep contributing to a Roth IRA as long as he works, regardless of his age. Roth IRA contributions aren’t deductible, but distributions are tax-free after you turn 59 1⁄2 and have owned the account for five years. No distributions are required during the Roth owner’s lifetime. (Beneficiaries must take RMDs from inherited Roth accounts — but these distributions are tax-free.)

The maximum Roth contribution for 2017 is $6,500 for people age 50 or older. The income restriction: You can’t contribute the maximum if your income exceeds $186,000 (married filing jointly) or $118,000 (single filers) — and you’re ineligible to make any Roth IRA contribution once your income reaches $196,000 (married filing jointly) or $133,000 (single filers).

THE BOTTOM LINE It’s always a good idea to double-check all IRA-related deadlines.


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