SECURE Act – Post 70 ½ IRA Contributions

By Sunwook Jin, CFP®, CRPC®, CMFC® (CRPC) conferred by College for Financial Planning

The SECURE act was signed into law on December 20, 2019.  There are some key provisions that may have an impact on your retirement strategy.  Let’s focus on post 70 ½ IRA Contributions.

OLD LAW – An individual who is 70 ½ by the end of the year may not make a non-rollover contribution to a traditional IRA.  That means if you had earned income and wanted to contribute to your traditional IRA like you have in the past, you were unable to.  If you had an old qualified retirement plan that you wanted to roll into a traditional IRA, you could do that.

NEW LAW – Starting in the 2020 tax year, the limit prohibiting someone age 70 ½ from contributing earned income to a traditional IRA is repealed.  You will still need earned income and adhere to IRA contribution limits, but the age restriction will no longer apply.

WHAT IT MEANS – If you are still earning income at 70 ½ and looking to shelter some money from taxes you will now be able to.  This can impact your retirement strategy so be sure to understand how this provision may affect you.

Check out the other key provisions of the SECURE Act

SECURE ACT Key Provisions

SECURE ACT Detailed Summary