Age Limitations on Contributions to Retirement Plans

Retirement plans with tax benefits are subject to many of rules and conditions, including limitations on the amount you can contribute and when you can contribute funds. Your age determines your annual contribution limit for retirement plans. Certain retirement accounts also require you to start withdrawing funds after age 70.

401k Plans

A 401k plan is a type of retirement plan that employers can offer to workers as a job benefit. Annual 401k contributions are limited to $17,000 if you are under age 50 for the 2012 tax year and $22,500 if you are age 50 or older. The limits are set to increase to $17,500 and $23,000, respectively, in 2013. You can continue putting money into a 401k plan as long as you are employed and have access to a plan. You have to start making minimum required withdrawals after age 70 1/2 if you are retired.

Traditional IRAs

A traditional individual retirement account is a plan you open on your own with a financial institution, such as a bank. You can contribute up to $5,000 to an IRA in 2012 if you are under age 50 and $6,000 if you are 50 or older. When you reach age 70 1/2, you can no longer contribute to a traditional IRA, and you have to start making required withdrawals regardless of whether you are employed.

Roth IRAs

A Roth IRA is a type of private retirement account that -- while funded with after-tax income -- offers tax-free withdrawals. Roth IRAs have the same contribution limits as traditional IRAs, but you can continue putting money into a Roth IRA after age 70 1/2 as long as you have earned income, and you don't have to make required withdrawals.

SIMPLE IRAs

The Savings Incentive Match PLan for Employees, or SIMPLE, IRA is a retirement plan that small businesses can provide to employees as an alternative to a 401k. The 2012 annual contribution limit for a SIMPLE IRA is $11,500 if you are under age 50 and $14,000 if you are 50 or older. You can continue contributing to a SIMPLE IRA after you reach age 70 1/2 as long as you are still employed and have access to your plan, but you must also make required withdrawals after age 70 1/2, even if you are still working.

About the Author

Gregory Hamel has been a writer since September 2008 and has also authored three novels. He has a Bachelor of Arts in economics from St. Olaf College. Hamel maintains a blog focused on massive open online courses and computer programming.

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