IRA Contribution Age Limits

by Emily Weller
Roth 401ks offer tax-sheltered growth.

When it comes to age limits for contributions, the different types of individual retirement arrangements have different rules. Some IRAs have hard and fast limits, meaning you can't contribute beyond a certain age -- not only that, you must start taking money out as well. Other IRAs never require that you stop making contributions based on your age.

Traditional IRAs

If you have a traditional IRA, the age of 70 1/2 is the magic number. Once you turn age 70 1/2, you can no longer contribute to your traditional IRA. On top of that, you must begin taking required minimum distributions by April 1 of the year after you turn 70 1/2. If you don't take the required distribution, you'll need to pay a tax of 50 percent of the amount you fail to withdraw. Since traditional IRAs are tax-deductible when you contribute, you need to pay income tax when you start taking distributions.

Roth IRAs

Roth IRAs have no age limit for contributions. You can continue to contribute to them as long as you live. Plus, you never have to take the money out of a Roth, meaning you can leave it to your descendants or to charity. You've already paid income tax on a Roth IRA, so the Internal Revenue Service isn't waiting to receive taxes from your contributions. While you can usually roll over a traditional IRA to a Roth IRA, you can't roll over the amount of the required distribution once you're 70 1/2 in an effort to avoid taking a distribution.

SIMPLE IRAs

In most cases, a Savings Incentive Match Program for Employees IRA is similar to a traditional IRA. A SIMPLE IRA plan is designed for small businesses and the self-employed. Contributions are tax deductible. Unlike a traditional IRA, though, an employee and employer may continue to contribute to a SIMPLE IRA beyond age 70 1/2. Although the employee can continue to contribute to a SIMPLE IRA, he must start taking the required minimum distributions from the account at that age.

SEP IRAs

You might have a Simplified Employee Pension plan IRA from your employer or if you are self-employed. Unlike a SIMPLE IRA, any employer can set up a SEP. The age limits for a SEP IRA are similar to those for a traditional IRA. You need to take required minimum distributions by April 1 of the year after you turn 70 1/2. As with a SIMPLE IRA, you can continue to contribute to a SEP IRA beyond the age of 70 1/2.

About the Author

Based in Pennsylvania, Emily Weller has been writing professionally since 2007, when she began writing theater reviews Off-Off Broadway productions. Since then, she has written for TheNest, ModernMom and Rhode Island Home and Design magazine, among others. Weller attended CUNY/Brooklyn college and Temple University.

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