Can I contribute to an IRA despite my age?


Q. I turned 70 1/2 in 2019. I understand the new SECURE doesn’t change my Required Minimum Distribution (RMD) obligations, but what about my IRA contributions? I had earned income in 2019. Can I now contribute to my IRA for 2019 because the age restriction has been removed?

— Still saving

A. The SECURE Act means big changes for IRAs. We’ll go over all those details in a moment, but first, let’s address your specific question.

You’re correct that anyone who has already started taking RMDs would remain under the pre-SECURE Act rules.

As for future contributions, we have some good news.

For 2019, you will not be able to make a deductible contribution, said Nicholas Scheibner, a certified financial planner with Baron Financial Group in Fair Lawn.

However, you can start making contributions for 2020 and 2021, he said.

And as you noted, earned income is still required to be eligible to make the contribution.

Make sure you are also not falling into a “double dip” with your IRA, Scheibner said.

If you use your IRA to make Qualified Charitable Distributions, or QCDs, while also contributing to your IRA, there could be trouble.

A QCD allows a 70 ½-year-old IRA owner to distribute funds from their IRA directly to charity tax-free, he said.

“With the SECURE Act, QCDs may be reduced by the total IRA contributions after age 70 ½,” Scheibner said. “This was a feature of the law that attempts to stop people age 70 ½ or older to make both a deductible IRA contribution and benefit fully from a QCD in the same year.”

Let’s review the other major changes from the SECURE Act.

IRA owners used to have to start taking RMDs at age 70 ½. That age has been raised to 72, Scheibner said.

“Unfortunately, for anyone who has already started taking RMDs, you must continue to take RMDs according to the old rules,” he said. “So if you are 71 in 2020, you will still need to take an RMD.”

Another big change was the elimination of so-called Stretch IRAs.

“The Stretch IRA allows for a beneficiary to extend the years required to withdraw money from an inherited IRA based on their own life expectancy table,” he said. “This only applied to non-spouse inherited IRAs, such as children or other beneficiaries.”

But with the new law, non-spouses won’t be able to stretch out their distributions, but instead, they need to take all the money out within 10 years “Eligible Designated Beneficiary.”

Spouses will be able to transfer the funds to their own IRA.

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This story was originally published on Jan. 30, 2020. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.