Can You Contribute to a 401k After Age 70?

It is possible to contribute to a 401(k) plan after reaching age 70, and even well beyond. The fundamental ability to contribute to a 401(k) has consistently been tied to employment status rather than age. This allows working individuals to continue building their retirement assets regardless of their age.

Core Eligibility Requirements

The primary requirement for making 401(k) contributions at any age, including after 70, is having earned income. This income must come from an employer that sponsors the 401(k) plan to which you are contributing. The Internal Revenue Service defines earned income as compensation such as wages, salaries, commissions, bonuses, and net earnings from self-employment.

Income from sources like pensions, annuity payments, Social Security benefits, or returns on investments does not constitute earned income for the purpose of 401(k) contributions. Confusion sometimes arises because the SECURE Act of 2019 removed the previous age cap for contributing to a Traditional IRA, but the rule for a 401(k) remains tied to active employment.

Contribution Limits and Types

The IRS sets an annual limit for employee contributions, which for 2024 is $23,000. This base amount applies to all eligible employees regardless of age. Individuals age 50 and over are eligible to make “catch-up” contributions. For 2024, this additional amount is $7,500, allowing a total contribution of $30,500 for the year. These contribution limits apply to the employee’s own deferrals into the plan.

Working past age 70 does not preclude an employee from receiving employer contributions. If the company’s 401(k) plan includes an employer match or profit-sharing component, eligible older workers will receive these contributions based on the plan’s formula. These employer amounts do not count against the employee’s personal contribution limits. The rules for employee and employer contributions apply equally to both Traditional (pre-tax) and Roth (after-tax) 401(k) accounts.

Interaction with Required Minimum Distributions

Continuing to contribute to a 401(k) works alongside the rules for Required Minimum Distributions (RMDs). An RMD is the amount that retirement plan account owners must withdraw annually starting at a certain age. The SECURE 2.0 Act raised this age, and for individuals turning 73 in 2023 or later, RMDs must begin in the year they reach that age.

The tax code provides a specific provision to address this, known as the “still-working exception.” This rule allows an individual to delay taking RMDs from the 401(k) plan of their current employer. To qualify, the individual must continue to be employed by the company sponsoring the plan and must not own more than 5% of that company.

This exception is narrowly focused and applies only to the 401(k) of the current employer. If the individual has other retirement accounts, such as a Traditional IRA or a 401(k) from a previous employer, the RMD rules still apply to those accounts. For example, a 74-year-old still working can delay RMDs from their current employer’s 401(k) but must take RMDs from their Traditional IRA. RMDs are not required from Roth 401(k) accounts during the original owner’s lifetime, a change that took effect in 2024.