Required Minimum Distributions Highlight Mailbag

Summer is in full swing, so this week's Slott Report Mailbag features just one question from a retiree who is planning on taking RMDs (Required Minimum Distributions). As always, we stress the importance of working with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Find out at this link.

1.

Are you allowed to contribute to a Roth if you have earned income and are 70 years old? I will be taking my first Required Minimum Distribution this year in 2011.

Answer:
Yes you can contribute to a Roth IRA after age 70 1/2 so long as you have earned income.  There are however phase out limits.  For 2011 if your filing a joint return the phase out starts at $169,000 and completely phases out at $179,000.  The numbers for single filers are $107,000 - $122,000.  There are no RMDs from a Roth IRA during lifetime unless it is an inherited Roth IRA. In addition an inherited Roth IRA can not receive a contribution.

By Marvin Rotenberg and Jared Trexler
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*Copyright 2011 Ed Slott and Company, LLC