Hi,
So I wanted to fund my Roth IRA for this year and Vanguard tells me my allowed contribution is $6500.00. I suspect this is because I am 49. Can I contribute $6500 in my 50th birthday year and should I wait until my actual birthday for the final $1000 just to be safe.
Beachmom
A Big Birthday? [IRA Catch-up Contributions]
Re: A Big Birthday?
No, you don't have to wait. You can also start funding your 401(k) the extra 6,000 too this year.
Edit: Some on this forum recommend that you don't actually fully fund your Roth until you have at least earned enough qualified income for the year, just in case.
Edit: Some on this forum recommend that you don't actually fully fund your Roth until you have at least earned enough qualified income for the year, just in case.
Last edited by 2retire on Thu Jan 01, 2015 11:14 am, edited 1 time in total.
Re: A Big Birthday?
You can contribute in the year you turn 50 even if it is Dec 31st. This goes for 401(k) / 403(b) / Roth catch-up, but not HSA catch-up since HSA catch-up is age 55.
Re: A Big Birthday? [IRA Catch-up Contributions]
Jump right in and enjoy a benefit of aging starting on Jan 1 of the year you turn 50. No need to wait for your birthday.
Laura
Laura
The views presented are my own and not necessarily those of the Department of State or the U.S. Government.
Re: A Big Birthday? [IRA Catch-up Contributions]
As mentioned, the catch-up contribution can be made any time during the calendar year in which the individual turns age 50. Similarly, the 10% penalty for early distributions from qualified plans does not apply if the distribution takes place after the employee separates from service, and the separation from service takes place any time during (or after) the year that the employee attains age 55. These "calendar year" rules should not be confused with the general rule for the 10% early distribution penalty, which applies if the distribution takes place any time before the actual day during the year that the individual reaches age 59 1/2. Not sure there is any good reason for the inconsistency in these age-related rules.