Maximum age to open traditional IRA?

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Herekittykitty
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Maximum age to open traditional IRA?

Post by Herekittykitty »

I think there have been changes to the maximum age, but I don't know what they are (if any) or when they will stop.

(My situation: Turned 70 the first half of 2020. Still working. I don't have an IRA of any kind. Income too high for a Roth IRA. Would like to open a traditional IRA for 2020 (I assume it is too late for 2019) and each year going forward for as long a I am working.

The question isn't whether it is advisable but if given my age I can do it.

I've looked on the IRS site and on various fund house sites and maybe the answer is there but I can't find it.

Thanks!
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arcticpineapplecorp.
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Re: Maximum age to open traditional IRA?

Post by arcticpineapplecorp. »

It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
retiredjg
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Re: Maximum age to open traditional IRA?

Post by retiredjg »

The SECURE Act - enacted 1/1/2020 - eliminated the age limit for contributing to traditional IRA. Earned income by you or spouse is required.
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ResearchMed
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Re: Maximum age to open traditional IRA?

Post by ResearchMed »

retiredjg wrote: Sat Sep 19, 2020 1:48 pm The SECURE Act - enacted 1/1/2020 - eliminated the age limit for contributing to traditional IRA. Earned income by you or spouse is required.
Is this permanent (unless amended, etc.) or just for 2020/pandemic times?
Are regular income limits the same?

RM
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retiredjg
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Re: Maximum age to open traditional IRA?

Post by retiredjg »

I am NOT a SECURE Act guru, but this was pre-COVID.

As far as I know, this is permanent. As far as I know, there was no change for income limits (although there usually is a change each new year outside of this act).
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ResearchMed
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Re: Maximum age to open traditional IRA?

Post by ResearchMed »

retiredjg wrote: Sat Sep 19, 2020 2:05 pm I am NOT a SECURE Act guru, but this was pre-COVID.

As far as I know, this is permanent. As far as I know, there was no change for income limits (although there usually is a change each new year outside of this act).
:oops: on me for not noticing the date more carefully!

Thanks.

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Eagle33
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Re: Maximum age to open traditional IRA?

Post by Eagle33 »

If your income is to high to contribute directly to a Roth, you may want to consider a Backdoor Roth contribution each year you have work income. Your income is too high for a deduction!
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Re: Maximum age to open traditional IRA?

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Topic moved to Personal Investments.
Katietsu
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Re: Maximum age to open traditional IRA?

Post by Katietsu »

Eagle33 wrote: Sat Sep 19, 2020 6:31 pm If your income is to high to contribute directly to a Roth, you may want to consider a Backdoor Roth contribution each year you have work income. Your income is too high for a deduction!
Yes. Please do this. Since you have no traditional IRA balance now, the back door Roth will work wonderfully for you. You would not want to do this in a year that you will have a large balance of pre tax funds in a traditional IRA on Dec 31 of a given year such as might be created by a rollover from a 401k to an IRA.
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Re: Maximum age to open traditional IRA?

Post by MathIsMyWayr »

retiredjg wrote: Sat Sep 19, 2020 2:05 pm I am NOT a SECURE Act guru, but this was pre-COVID.

As far as I know, this is permanent. As far as I know, there was no change for income limits (although there usually is a change each new year outside of this act).
Once you hit the RMD age, you have to take an RMD and may also contribute to IRA.
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Re: Maximum age to open traditional IRA?

Post by retiredjg »

MathIsMyWayr wrote: Sun Sep 20, 2020 2:08 pm
retiredjg wrote: Sat Sep 19, 2020 2:05 pm I am NOT a SECURE Act guru, but this was pre-COVID.

As far as I know, this is permanent. As far as I know, there was no change for income limits (although there usually is a change each new year outside of this act).
Once you hit the RMD age, you have to take an RMD and may also contribute to IRA.
Weird, isn't it? :confused
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Re: Maximum age to open traditional IRA?

Post by MathIsMyWayr »

retiredjg wrote: Sun Sep 20, 2020 2:42 pm
MathIsMyWayr wrote: Sun Sep 20, 2020 2:08 pm
retiredjg wrote: Sat Sep 19, 2020 2:05 pm I am NOT a SECURE Act guru, but this was pre-COVID.

As far as I know, this is permanent. As far as I know, there was no change for income limits (although there usually is a change each new year outside of this act).
Once you hit the RMD age, you have to take an RMD and may also contribute to IRA.
Weird, isn't it? :confused
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Herekittykitty
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Re: Maximum age to open traditional IRA?

Post by Herekittykitty »

arcticpineapplecorp. wrote: Sat Sep 19, 2020 1:34 pm does this help:

https://www.investopedia.com/ask/answers/147.asp
From the Investopedia link:

"Key Takeaways
There is no age restriction for contributions to Roth IRAs.
You can now make contributions to traditional IRAs beyond the previous age limit of 70½ years, thanks to the SECURE Act.
There is no age restriction for opening a new, traditional IRA as long as you fund it via a rollover or transfer from an eligible retirement account."

I do not have any IRA's. I turned 70 the first half of this (2020) year. I am single (widow.) My earned income is too high to open a Roth IRA. I want to open a traditional IRA and continue contributing to it as long as I am working. I cannot roll over from my current employer's 401k to a traditional IRA (and I don't want to). I could roll over a small TSP account from previous employment into an IRA but I don't want to.

Does the Investopedia article quoted above (assuming it is correct) mean that I, given my situation as described, could roll over money from a former employer into a traditional IRA if I wanted to (which I don't) but I cannot open a new traditional IRA?
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Alan S.
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Re: Maximum age to open traditional IRA?

Post by Alan S. »

If new TIRA contributions can be made without age limit, it makes no sense that a new TIRA account could not be opened by a taxpayer 70+ to receive a new regular TIRA contribution. I don't see anything in the Secure Act that indicates such a new account restriction.

But if you make that contribution and deduct it, be aware of the negative effect in relation to QCDs.
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ResearchMed
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Re: Maximum age to open traditional IRA?

Post by ResearchMed »

If one doesn't have an IRA yet, can one open one with just a very small rollover from a 401k/403b into a new IRA, and then, assuming one is still working, make regular contributions each year while working?

One can mix rollover money and new money in the same IRA, but one might lose some protections for the rollover money. However, that shouldn't matter too much if there is only a very small amount of rollover money.

Or does it mean that one can't even roll over 401k/etc., type funds if there isn't already an IRA?

RM
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retiredjg
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Re: Maximum age to open traditional IRA?

Post by retiredjg »

ResearchMed wrote: Sun Sep 20, 2020 10:34 pm If one doesn't have an IRA yet, can one open one with just a very small rollover from a 401k/403b into a new IRA, and then, assuming one is still working, make regular contributions each year while working?

One can mix rollover money and new money in the same IRA, but one might lose some protections for the rollover money. However, that shouldn't matter too much if there is only a very small amount of rollover money.

Or does it mean that one can't even roll over 401k/etc., type funds if there isn't already an IRA?

RM
Even before the SECURE Act, it was possible to open an IRA at any age using a rollover contribution. The thing that changed is making ordinary contributions - there is now no age limit on that either.
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Herekittykitty
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Re: Maximum age to open traditional IRA?

Post by Herekittykitty »

Double post.
Last edited by Herekittykitty on Mon Sep 21, 2020 7:51 pm, edited 1 time in total.
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Topic Author
Herekittykitty
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Re: Maximum age to open traditional IRA?

Post by Herekittykitty »

I still am not clear on the answer, yes or no, to my question: Can I, given my circumstances, open a traditional IRA without rolling anything over to do it?

I also do not know the answer to Research Med's interesting question regarding whether I could roll over a small amount of money ($1,000?) from my small (about $30,000) TSP (the only 401k type investing I have with a previous employer) and then fund it with other money (for example my checking account.)

One would think the answers to these questions would appear on the IRS site or on a fund house's site, but nope - not as far as I can tell.

But if investing information is not clear, simple, and downright concrete, I am not likely to recognize it, much less understand it.

(And yes, I do wish I had opened a traditional IRA when well below 70. But alas, I didn't.)
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Eagle33
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Re: Maximum age to open traditional IRA?

Post by Eagle33 »

Herekittykitty wrote: Mon Sep 21, 2020 7:50 pm I still am not clear on the answer, yes or no, to my question: Can I, given my circumstances, open a traditional IRA without rolling anything over to do it?
YES. You can open a traditional IRA. If you have 2020 earned income from working, then you can CONTRIBUTE up to $7k for 2020 assuming your income is at least $7k in 2020. However, because your income is greater than the the limit to DEDUCT the contribution, the contribution will be NON-Deductible on your tax return.

Because the contribution is non-deductible, you can then do what is called a Backdoor Roth as I mentioned above. https://www.bogleheads.org/forum/viewtopic.php?p=5504775#p5504775
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retiredjg
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Re: Maximum age to open traditional IRA?

Post by retiredjg »

Herekittykitty wrote: Mon Sep 21, 2020 7:50 pm I still am not clear on the answer, yes or no, to my question: Can I, given my circumstances, open a traditional IRA without rolling anything over to do it?
Yes.

I also do not know the answer to Research Med's interesting question regarding whether I could roll over a small amount of money ($1,000?) from my small (about $30,000) TSP (the only 401k type investing I have with a previous employer) and then fund it with other money (for example my checking account.)
Yes.
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Herekittykitty
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Re: Maximum age to open traditional IRA?

Post by Herekittykitty »

Thanks much to everyone for the helpful discussion and advice and the clear answers.

I enjoyed the discussion and learned a lot. I also appreciate the concrete easy to understand, idiot proof replies! Sometimes concrete, easy to understand, and idiot proof hits the spot in a good way!

:D
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