IRA Rules

Posts Tagged ‘minimum ira distribution’

Question: Can one continue contributions to a Traditional IRA past age 70.5 while collecting the RMD at the same time?

I reached age 70-1/2 last year and will collect my first IRA Required Minimum Distribution (RMD) this year. This may be an odd question but can I still make a maximum tax free IRA contribution this year? For me this year, the max is $6,000. OR is it that once you start receiving RMDs past your 70-1/2 birthday, one CANNOT make any more IRA contributions for the rest of their lives?

Answer: Great question! First, recent legislation suspended RMDs for 2009.

Next, you cannot contribute to a traditional IRA for the year in which you turn age 70 1/2, or older. You can, however, contribute to a Roth IRA. Your contribution limit for 2008 is: 100% of earned income, or $6,000 (includes $1,000 catch-up amount), whichever is less.

Hope that helps.

Disclaimer. The information above is for general purposes only and is not be be construed as tax, legal, or specific advice for any individual. Please consult with your professional advisors before you make any decisions regarding your finances.

In Service 401k Distributions to Roth IRAs by Pete Mitchell