Can You Contribute to a Roth IRA After Retirement? (2024)

FAQs

Can You Contribute to a Roth IRA After Retirement? ›

You can keep contributing to a Roth IRA after retirement, as long as you have some earned income. Roth IRA contributions aren't tax-deductible on an up-front basis.

Yes, you can, but only if you have taxable compensation.

Continuing to contribute to a traditional IRA is possible even if you're officially retired but still work or perform services of any sort that you're paid for and can document or report on your tax return.

There are no restrictions on age for contributing to a Roth IRA. As long as you have some income and do not exceed the MAGI limits, you can contribute whether you are 16 or 86. Roth IRAs also have no required minimum distributions (RMDs).

You must first have eligible compensation to contribute to an IRA. The IRS calls this earned income.

Social Security won't stop you from funding an IRA

You're allowed to collect Social Security even if you're working on a full-time basis. And once you reach FRA, you can earn any amount of income without it impacting your benefits.

You can make contributions to your Roth IRA after you reach age 70 ½. You can leave amounts in your Roth IRA as long as you live. The account or annuity must be designated as a Roth IRA when it is set up.

With a traditional IRA, you must stop making contributions at age 73. Roth IRAs come with no such rule. In turn, you can continue contributing to it for as long as you live, making them valuable assets for those who want to build up wealth to transfer to their heirs.

Compensation for purposes of contributing to an IRA doesn't include earnings and profits from property, such as rental income, interest and dividend income, or any amount received as pension or annuity income, or as deferred compensation.

If you file taxes as a single person, your Modified Adjusted Gross Income (MAGI) must be under $153,000 for tax year 2023 and $161,000 for tax year 2024 to contribute to a Roth IRA, and if you're married and filing jointly, your MAGI must be under $228,000 for tax year 2023 and $240,000 for tax year 2024.

At what age is a Roth IRA not worth it? ›

You're never too old to fund a Roth IRA. Opening a later-in-life Roth IRA means you don't have to worry about the early withdrawal penalty on earnings if you're 59½. No matter when you open a Roth IRA, you have to wait five years to withdraw the earnings tax-free.

The Roth IRA five-year rule says you cannot withdraw earnings tax-free until it's been at least five years since you first contributed to a Roth IRA account.

The short answer is no – there are no legal restrictions to Roth conversion based on age or income. Practically, however, the decision involves carefully weighing tax implications, healthcare costs, estate planning and more. Spreading conversions over multiple years often makes the most financial sense for larger IRAs.

Prior to the passage of the SECURE Act in 2019, contributions to traditional IRAs were banned beyond age 70 ½, but that is no longer an issue. You can now contribute to a traditional or Roth IRA no matter your age.

It is possible to open a Roth IRA later in life and start saving. However, there are certain criteria you'll have to meet in terms of income, the amount you can contribute and when you are eligible to make penalty-free withdrawals.

The Roth IRA income limit to make a full contribution in 2024 is less than $146,000 for single filers, and less than $230,000 for those filing jointly. If you're a single filer, you're eligible to contribute a portion of the full amount if your MAGI is $146,000 or more, but less than $161,000.

Keep in mind: Just because you have been eligible to contribute to a Roth IRA in the past does not mean you necessarily will in future years. IRS thresholds are adjusted annually, and you must qualify each year. You cannot contribute more to an IRA than your earned income for the year.

Roth IRA. You can contribute at any age if you (or your spouse if filing jointly) have taxable compensation and your modified adjusted gross income is below certain amounts (see and 2022 and 2023 limits).

You can withdraw the money, recharacterize the excess contribution into a traditional IRA, or apply your excess contribution to next year's Roth. You'll face a 6% tax penalty every year until you remedy the situation.

If your income is too high, you won't be able to contribute to a Roth IRA directly, but you do have an option to get around the Roth IRA income limit: a backdoor Roth IRA. This involves putting money in a traditional IRA and then converting the account to a Roth IRA.