09 Apr I’m 69 and working. Can I save to an IRA?

Q. I was told that since I am 69 years old, still working full time and collecting Social Security as of January 2024, I can contribute to an IRA or Roth IRA with no limit. Is this true?
— Investor, maybe

A. Based on what you say, it seems you may be able to contribute.

But it’s not unlimited.

In 2024, as long as you have earned income, you can contribute a total of $7,000 into a traditional IRA and/or a Roth IRA, said Deva Panambur, a fee-only planner with Sarsi, LLC in West New York.

If you are over the age of 50, you can contribute an additional $1,000 for a total of $8,000 into a traditional IRA and/or a Roth IRA, he said.

According to the IRS, “earned income includes all the taxable income and wages you get from working for someone else, yourself or from a business or farm you own.”

Social Security benefits are not considered earned income, Panambur said.

“Contributions to a traditional IRA are tax deductible in the year contributions are made but are taxed when funds are withdrawn,” he said. “There are no tax deductions for Roth IRA contributions but withdrawals are not taxed if you are over the age of 59 1/2 and have had the account for at least five years.

Your ability to contribute to a Roth IRA is phased out at modified adjusted gross income (MAGI) of between $146,000 and $161,000 for singles and heads of household and between $230,000 and $240,000 for married couples filing jointly, he said. For married couples filing separate tax returns, the phase out range is between $0 and $10,000, he said.

If you are covered by a workplace retirement plan such as a 401(k), your ability to deduct IRA contributions phases out if your (MAGI) is between $77,000 and $87,000 if you are a single filer and between $123,000 and $143,000 if you are filing jointly with your spouse, Panambur said.

If you are not covered by a workplace retirement plan but your spouse is covered by one, then the phaseout range for you is between $230,000 and $240,000 if you are jointly filing with your spouse, he said. The phaseout range is between $0 and $10,000 if you are married but filing separately.

“Since 2020, there is no age limit on making regular contributions to traditional or Roth IRAs,” he said.

Happy investing!

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This story was originally published in April 2024.

NJMoneyHelp.com 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.