If you're still working, you can contribute the full amount of your salary deferral to a Roth 401 (k), regardless of your age. Like the traditional 401 (k) plan, RMDs are required once you leave the service or if you own 5% or more of the company that employs you. This is a key difference between a Roth 401 (k) and a Roth IRA. However, distributions may not be taxable (check with your tax advisor).
People who are 50 or older at the end of the calendar year can make annual contributions to get up to speed. There is no maximum age for participating in a 401 (k) plan. As long as you're still working, you're never too old to contribute. If your employer offers group benefits that include a 401 (k) plan, you have a great way to save for retirement.
Regardless of your age, if you're still working, you can take advantage of tax benefits and any equivalent contribution from your employer. If you're over 59.5 years old, you can withdraw from a 401 (k) plan without penalty. If you need more information about participating in a 401 (k) plan, talk to our experienced agent. Customers who are still working after age 70 and a half can generally continue to contribute to employer-sponsored 401 (k) accounts and SEP IRAs.
In fact, employers must continue to make employer contributions to the SEP IRA of an employee over 70 and a half years old if they make similar contributions to the accounts of younger employees. Direct contributions to a traditional IRA are not allowed after the client turns 70 and a half years old, although the client can transfer funds from another type of retirement account to their traditional IRA. The rules for contributing to an IRA after 70 and a half years depend on whether the account is a traditional IRA, a Roth IRA, or an SEP IRA.