Can You Contribute to an IRA After Age 72?

Saving for retirement doesn’t necessarily stop once you reach your 70s. Many people continue working or earning income past traditional retirement age, leading to questions about whether they can still contribute to an Individual Retirement Account (IRA). Changes in tax laws have also impacted contribution rules, making it important to stay informed.

Understanding IRA contributions after age 72 requires looking at eligibility requirements and distribution rules.

Age Criteria for IRA Contributions

The SECURE Act of 2019 removed the restriction that prevented contributions to a traditional IRA after age 70½. Now, as long as you have earned income, you can contribute at any age. This change aligns traditional IRAs with Roth IRAs, which have never had an age limit for contributions.

With more people working later in life, this update allows continued retirement savings, benefiting those who started saving later or faced financial setbacks.

Earned Income Requirements

To contribute to an IRA, you must have earned income, which the IRS defines as wages, salaries, tips, bonuses, or self-employment earnings. Income from Social Security, pensions, annuities, dividends, rental properties, or interest does not qualify.

For employees, W-2 wages from full-time or part-time jobs count. Self-employed individuals can also contribute, but their net earnings must be reduced by deductible business expenses and half of their self-employment tax. For example, if someone earns $30,000 in net self-employment income, they must subtract $2,295 (half of the 15.3% self-employment tax) before determining their contribution limit.

In 2024, the maximum IRA contribution is $7,000, with an additional $1,000 catch-up contribution for those 50 and older. However, contributions cannot exceed total earned income. If someone earns only $5,000, their IRA contribution is capped at that amount.

Traditional IRA Contribution Rules

Traditional IRAs offer tax advantages, but deductibility depends on income and workplace retirement plan participation. In 2024, single filers with a modified adjusted gross income (MAGI) of $77,000 or less can deduct the full contribution, with deductions phasing out between $77,000 and $87,000. For married couples filing jointly where one spouse is covered by a workplace plan, the phase-out range is $123,000 to $143,000. Those above these limits can still contribute but must do so on a non-deductible basis.

Non-deductible contributions require filing IRS Form 8606 to track after-tax contributions. Without proper documentation, the IRS may assume all withdrawals are taxable. Keeping records ensures accurate tax treatment when withdrawing funds in retirement.

Roth IRA Contribution Rules

Roth IRAs allow tax-free withdrawals in retirement. Contributions are made with after-tax dollars, meaning there is no immediate deduction. However, withdrawals of both contributions and earnings are tax-free if the account holder is at least 59½ and has held the account for at least five years.

Income limits determine Roth IRA eligibility. In 2024, single filers with a MAGI below $146,000 can contribute the full amount, with contributions phasing out between $146,000 and $161,000. For married couples filing jointly, the phase-out range is $230,000 to $240,000. Those exceeding these limits cannot contribute directly but may use a backdoor Roth IRA strategy. This involves making a non-deductible contribution to a traditional IRA and converting it to a Roth. However, if the individual holds pre-tax IRA funds, the pro-rata rule applies, which can create additional tax obligations.

Required Minimum Distributions

While contributing to an IRA after 72 is allowed, required minimum distributions (RMDs) still apply to traditional IRAs. The SECURE 2.0 Act, passed in 2022, raised the RMD starting age to 73 for those born between 1951 and 1959, and to 75 for those born in 1960 or later. This means individuals who continue contributing must also begin withdrawing funds once they reach the applicable RMD age.

The required withdrawal amount is based on the account balance as of December 31 of the previous year and a life expectancy factor from IRS tables. For example, if someone turning 73 in 2024 has a traditional IRA balance of $500,000 and a life expectancy factor of 26.5, their first RMD would be approximately $18,868 ($500,000 ÷ 26.5). Failing to take the required amount results in a penalty, which was reduced from 50% to 25% under SECURE 2.0, and further drops to 10% if corrected within two years.

Roth IRAs do not require RMDs during the account holder’s lifetime, making them useful for preserving assets for heirs or managing taxable income in retirement. Some retirees convert traditional IRA funds to a Roth to eliminate future RMDs, though this triggers immediate taxation on converted amounts.