IRA Contributions By the Elderly

IRA Contributions By the Elderly

Dear Garden State Trust:

I have read that the age limits on IRA contributions have been removed. I’m 71, so does it really make sense for me to make an IRA contribution now?

—Retired Saver

Dear Retired:

Probably not, but more of your financial information is needed to be certain.

The tax benefits for IRA contributions are greatest for those who can leave the money untouched for the longest, who gain the most tax-deferred compounded account growth. You will have to begin your Required Minimum Distributions next year, so a portion of what you defer this year will be coming right back to you.

However, if you are confident that your tax bracket is higher this year than it will be in the future, the income tax deduction for your IRA contribution could make it worthwhile. But keep in mind that you must have earned income to make any IRA contribution—interest income, dividends, and capital gains do not count.

We would be pleased to have an in-person meeting to tell you more.

Do you have a question concerning wealth management or trusts? Send your inquiry to contact@gstrustco.com

(December 2022)
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