dmertz
Level 15

Retirement tax questions

What you are referring to as a "rule" is actually a federal statute, part of the tax code established by federal law, and having a method to be able to correct a violation of that statute rather than incur the excess-contribution penalty is GOOD!  In this case, the lesson taught by the parents is that one needs to understand the eligibility requirements before making a retirement contribution, an important aspect of saving for retirement.