The Age Cutoff for IRA Contributions

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I am retired and will turn 70 in March. I just sent my traditional IRA contribution for 2016, but my IRA administrator said I can’t contribute because I will be 70½ this year. I thought I could contribute before my 70th birthday or at least make a prorated contribution based on the number of months before I turn 70½.

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You can no longer contribute to a traditional IRA starting in the calendar year you turn age 70½. "It all depends on whether you were born before, on or after July 1," says Jeffrey Levine, chief retirement strategist for Ed Slott and Co., which provides IRA advice. Because your birthday is before July 1, you won’t be able to make a traditional IRA contribution this year, and you can’t prorate your contributions for the part of the year before you reach age 70½. The 70½ is key; people who turn 70 in the second half of the year can still contribute to a traditional IRA this year.

But you may be able to contribute to a Roth IRA, which has no age cutoff. To qualify for a Roth, your joint income must be below $194,000 in 2016 ($132,000 if you're single). The amount of the contribution starts to phase out for married couples filing jointly who earn more than $184,000 in 2016, or $117,000 for singles. See Retirement Plan Contribution and Income Limits for 2016 for more information.

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You can make contributions to an IRA (traditional or Roth) only if you or your spouse earned income from a job during the year. If your spouse is still working but you are retired, your spouse can contribute to an IRA on your behalf, but your age cutoff for traditional IRA contributions remains the same, even if your working spouse is younger.

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As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.