Is it too late to set up a retirement fund? I am in my 60s but plan to continue working into my 70s.
Hi Andrew, as long as you have earned income (such as from working, as you indicated), you can contribute to a traditional IRA up to age 70. If you still want to save beyond that age, you can contribute to a Roth IRA (again assuming you have wage income). And if you are self-employed, you can contribute to a SEP IRA (SEP stands for simplified employee pension plan) as long as you have earned income (even beyond age 70 1/2!). So in short, you still have lots of options to save for your retirement!
Dear Andrew: You can contribute to a traditional IRA until age 70 1/2, but there is no age limit on contributions to a ROTH IRA, provided that you have earned income and do not hit the income cap. And depending on your employment situation --- whether you work for an employer with a defined contribution plan or are self-employed --- there may be other options at your disposal. I have set up a number of 401k plans for businesses with just a few employees - one or two even. Thanks to technology, the cost of establishing and running such a plan has come down significantly over the past ten years, to the point where they can be cost-effective for small businesses and entrepreneurs. Feel free to respond back with any further questions or additional info.
As others have answered, YES! If your modified adjusted gross income is under $127,000 (single) or $188,000 (married filing jointly) and the current year tax deduction is not critically important to you, I would consider contributing to a Roth IRA. If tax rates go up (as many believe they will), the ability to take withdrawals tax-free will be even more beneficial. I like the idea of forgoing the deduction on a $5,000 investment today in exchange for being able to withdraw $10,000 tomorrow completely income tax-free. Unlike traditional IRAs, the Roth is not subject to required minimum contributions which allows your IRA to continue growing tax-free for as long as you like. Your Roth IRA can also be a great wealth transfer vehicle, allowing you to contribute money that can pass to your heirs income tax-free. Because there are rules, restrictions and other variables to consider, you should discuss your goals with a financial advisor and, with his or her assistance, come up with a plan to help you meet your retirement and estate planning goals.
No, it's not too late. You can contribute to your IRA or ROTH IRA up to age 70 1/2, as long as you have earned income. Remember, the rules relating to the deductibility of a traditional IRA contribution are a bit complicated. And contributions to a ROTH IRA are limited based on annual income.
It is never too late to start saving, and yes as long as you have earned income not income from investments you can save in a traditional IRA until you reach age 70 after that age you can continue to contribute to a Roth IRA as long as you continue to have earned income. By setting aside money in an IRA,Traditional or Roth, you will accomplish two objectives that will help you in retirement. The first is that you will have an additional source of income in retirement and the second by saving the money you will reduce your spendable income and make the transition to retirement a little easier. Choosing the best IRA is really a tax question. When do you want to pay the taxes and the easy answer is if you expect your taxes to be higher when you retire then choose a ROTH if you expect them to be lower choose a Traditional. You can always do both as long as you do not exceed the annual limits set by the IRS.