Is it permissible for a 70-year-old person to buy an IRA?

By Denise Appleby AAA
A:

It depends. For Roth IRAs, there are no age restrictions. For Traditional IRAs, there are no age restrictions if you are establishing a new IRA to which you will transfer or roll assets from another IRA or eligible retirement plan, such as a qualified plan, 403(b) account or 457(b) account.

However, if you are establishing a new Traditional IRA to make regular IRA participant contributions, then you are allowed to make a participant contribution, provided you do not reach age 70.5 in the year you make that first contribution. You may use the following as a guideline for the year you turn age 70:

If your seventieth birthday occurs anytime from January 1 to June 30 of the year you want to begin contributing to a Traditional IRA, then you will reach age 70.5 by year-end; as a result, you are not allowed to make an IRA participant contribution to a Traditional IRA for that tax year.

If your seventieth birthday occurs anytime from July 1 to December 31, then you will not reach age 70.5 by year-end; therefore, you are allowed to make an IRA participant contribution to a Traditional IRA for that tax year.

If you are not eligible to make a participant contribution to a Traditional IRA, talk to your tax professional about making a contribution to a Roth IRA instead. He or she can help you determine if this alternative suits your financial profile.

This question was answered by Denise Appleby (Contact Denise)

RELATED FAQS

  1. Can I purchase mutual funds for my IRA?

    Learn how to invest your IRA assets in mutual funds. Discover a few of the different types of mutual funds available for ...
  2. How do Pay As You Go pension plans work?

    Learn how pay-as-you-go pension plans are different than fully funded pension plans and why some government plans are running ...
  3. Who is eligible for a Teacher Retirement?

    Learn about the retirement option, the Teacher Retirement System, offered to teachers and other public school employees, ...
  4. What's the difference between a financial advisor and a financial planner?

    Seeking professional advice from a financial advisor may involve asking for financial help from a certified financial planner, ...
RELATED TERMS
  1. Senior Move Manager

    Senior move managers (SMMs) help seniors downsize and relocate ...
  2. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  3. Gold IRA

    Definition of Gold IRA
  4. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
  5. Death Master File (DMF)

    Also known as Social Security Death Index. A list of people whose ...
  6. Leveraged Benefits

    The use – by a business owner or professional practitioner – ...

You May Also Like

Related Articles
  1. You need to be patient, diligent and perseverant to be successful at investing, but more importantly, you need to start early.
    Investing Basics

    Why You Should Start Investing Early? ...

  2. Many of us fantasize about winning a big lottery jackpot. Let’s say that actually happened? What would you do with the money? How would you manage it?
    Professionals

    Tips For Managing A Cash Windfall

  3. Retirement

    Planning Ahead for 2015's Tax Law Changes

  4. Even though inflation currently seems tame, it's still the worst enemy of retirees. Here are some tips to reduce its impact.
    Professionals

    Tips For Managing Inflation In Retirement

  5. Retirement

    5 Crucial Tips For Your Retirement Income ...

Trading Center