My wife and I are both over 70. Can we open a new IRA and contribute 7,000 each to lower our tax bill?

[xmasbaby0]

Are you still working and earning income?

[ColeenD3]

Yes, but you must have that much in earned income to contribute. For 2020 and later, there is no age limit on making regular contributions to traditional or Roth IRAs.

[wweir3]

Our AGI is about 120,000, not participating in a corporate 401(k), but I thought I had read that a NEW ira had to be from a rollover, not a new contribution..  Did I read that incorrectly?

[JohnB5677 · Accepted solution]

• You stated you're not covered by a retirement plan at work.
• Your AGI will not trigger a limit. There is no limit if work doesn't have a retirement account.
• For 2020 and later, there is no age limit on making regular contributions to traditional or Roth IRAs.
• However,  in 2019, if you were 70 ½ or older, you couldn't make a regular contribution to a traditional IRA. However, you could have contributed to a Roth IRA and made rollover contributions to a Roth or traditional IRA regardless of your age.
• You must have earned income.  "Earned income" for IRA purposes includes wages, salaries, commissions, self-employment income, alimony, maintenance, and tax-exempt combat pay. If you have income from other sources, such as rental property income or pension income, you can't contribute those funds to an IRA.