What Are the IRA Contribution Age Limits?

Individual Retirement Accounts, or IRAs, are popular options for people who wish to save and invest money for retirement. An IRA may be an alternative to an employer-provided 401k plan, or it can be a way to save money beyond your maximum 401k contributions.

Updated 8/31/2023

At Addition Financial, we work closely with members to help them plan for retirement. We get many questions about how IRAs work. One of the most common is this:

“What is the IRA contribution age limit?”

Before you make any decisions about your retirement, you should know what your options are. With that in mind, here’s what you need to know about IRA contributions and age limits.

Minimum Age for IRA Contributions

Sometimes, parents want to set up IRAs in their children’s names. If that’s something you want to do, you might be wondering if there’s a minimum age for IRA contributions.

The short answer is no, but there’s a catch. If your child wants to contribute to an IRA in their own name, they must earn enough money in a year to equal or exceed the amount of their contribution.

For teenagers who are old enough to work, it can be relatively easy to meet the minimum earning requirements and make a contribution. Keep in mind that money earned from doing household chores is not eligible income.

Maximum Age for IRA Contributions

In addition to no minimum age there is maximum age to contribute to an IRA so long as you are earning income. Or you have a spouse who is earning income.

The income requirement does not apply to IRA rollovers or transfers, which you can do at any age. In other words, if you have another IRA, a 401(k), 403(b) or another retirement savings plan, you can roll that money into your IRA at any age, regardless of whether you are currently earning income or working.

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Other Age-Related Rules for IRAs

There are two other age-related rules you should know about if you own (or plan to open) an IRA. The first relates to when you may begin to withdraw money from your IRA if you wish, and the second relates to when you must begin to withdraw money.

  1. When you reach the age of 59 ½, you can access the money in your traditional IRA, and withdraw money from your IRA without accruing an early withdrawal penalty. However, you should be aware that you will still be required to pay ordinary income taxes on the amount you withdraw. If you have a Roth IRA, there is no age restriction on when you may withdraw your contributions. However, if you withdraw investment gains or converted amounts, age limits and time limits will be applied to determine your tax liability.
  2. When you reach the age of 73 you must begin to take withdrawals from your traditional IRA. The same rule applies to other qualified retirement plans, including 401(k) and 403(b) plans, SEPS and others. The withdrawals are known as required minimum distributions. These minimums do not apply to Roth IRAs while you are alive. However, they do apply to Designated Roth Accounts offered as part of a 401k plan as well as to inherited Roth IRA accounts.

You should speak with your accountant or financial adviser to ensure you understand the rules about IRA contributions, withdrawals and taxation.

Other IRA Information

In addition to understanding the contribution age limits for traditional and Roth IRAs, you should also know about the contribution limits.

In 2023 the maximum IRA contribution increased to $6,500 — up from $6,000 in 2019. There were also some changes to the income phase-out ranges and other rules. You can find full details on the Internal Revenue Service website here

Setting up a traditional or Roth IRA can make it easy to save for retirement for you, your spouse and your children. If you choose an IRA, it’s essential to understand the IRA age contribution limits as well as the withdrawal and tax requirements.

To learn more about Addition Financial's retirement accounts, which include both traditional and Roth IRAs, please click here now.

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