Can a Person Who Is Retired Continue To Fund an IRA?

Retirement planning is an important part of any individual’s financial life. Not only does it require money, but you also need to know your long-term goals. Ask yourself when you’d like to retire and consider how much money you’ll need to maintain your lifestyle.

There are other considerations, such as whether you’ll stop working completely or if you intend to supplement your retirement income with a part-time or freelance job.

The accounts you have during your retirement will also play into how you plan for that key point in your life. You may have regular interest-paying accounts like a savings account or a certificate of deposit (CD). And then there are special retirement accounts. For instance, you may participate in a 401(k) sponsored by your employer, fund your retirement account (IRA) on your own, or both. Learn how to continue funding your IRA after you retire.

Key Takeaways

  • All retirees can contribute to traditional IRAs if they earn income, according to the SECURE Act of 2019.
  • Retirees can continue to contribute earned funds to a Roth IRA indefinitely.
  • Contributions cannot be made with unearned income, including money from capital gains, dividends, or investment interest.
  • You cannot contribute an amount that exceeds your earnings, and you can only contribute up to the annual contribution limits set by the IRS.
  • People with traditional IRAs must start taking required minimum distributions when they reach 73, beginning in 2023 (up from 72 for previous years). On Jan. 1, 2033, the age increases to 75.

Funding an Individual Retirement Account (IRA)

Whether you can continue to fund an IRA depends on whether you have any earned income after you retire. This includes wages, salaries, tips, bonuses, commissions, earnings from self-employment, long-term disability payments, and union strike benefits. Keep in mind that you cannot contribute anything from other sources, such as capital gains, dividends, or investment interest.

But remember, IRAs fall into two different general categories:

  • The Traditional IRA: This account allows you to fund your account using pretax dollars. This lowers your annual income, thereby reducing your annual tax liability. The investments in your account are allowed to grow on a tax-deferred basis. You are not taxed until you begin taking distributions.
  • The Roth IRA: Withdrawals from this account are tax-free, but the contributions are made with after-tax dollars.

Funding a Traditional IRA

Continuing to contribute to a traditional IRA is possible even if you’re officially retired but still work or perform services of any sort that you’re paid for and can document or report on your tax return.

Remember that earned income does not include certain forms of compensation, including those from a pension, an annuity, or Social Security. It also doesn’t include investment income or earnings generated by assets. This means that the money you contribute has to be earned from work you’re being paid to do.

Under the terms of the SECURE Act of 2019, all retirees can now contribute to traditional IRAs if they earn income. This means that the previous contribution cutoff age of 70½ no longer applies; however, traditional IRA holders must take required minimum distributions (RMDs) at age 73 (up from the previous age of 72).

No matter your age or employment status, you can never exceed the annual contribution limits set by the IRS for both IRAs. For 2024, the limit is $7,000 (up from $6,500 in 2023). If you’re 50 or over, it is $8,000 (up from $7,500 in 2023).

Funding a Roth IRA

A Roth IRA affords a lot more flexibility than a traditional one. No matter how old you are, you can continue to contribute to your Roth IRA as long as you’re earning income—whether you receive a salary as a staff employee or 1099 income for contract or freelance work. Conversely, you never have to take distributions from the account either.

Again, the deposits must be made with earned income: wages, fees, etc. So the $1,000 you got paid for a consulting job would be eligible, while your monthly $1,000 Social Security benefit isn’t.

Of course, you aren’t allowed to contribute more than the amount you have earned that year. Also, your modified adjusted gross income (MAGI) cannot exceed the annual income limits that dictate whether you can contribute to a Roth IRA at all—less than $240,000 for 2024 (up from $228,000 in 2023) for married couples filing jointly but under $161,000 (up from $153,000 in 2023) for single taxpayers.


The full retirement age for individuals born after 1960, at which point they can begin collecting full Social Security retirement benefits.

Advantages and Disadvantages

Funding an IRA during retirement has both benefits and drawbacks. And there’s no hard-and-fast rule about whether it’s a good idea. After all, it all depends on your financial situation, so it’s up to you to decide whether contributing to your account after you retire is the right move for you.


The main advantage of contributing to your IRA during retirement is that you’ll be padding your nest egg. Doing so can allow you to save up a nice amount of money. If you play your cards right, you can accumulate some additional interest on this sum and have more down the road.

If you’re disciplined enough, saving more may help you spend less during retirement. Setting aside and budgeting for your IRA contributions during retirement can help you cut down other expenses. Maybe you can reduce that daily coffee run to just once or twice a week or skip it altogether and put that money into your IRA for a few years.

If you choose to fund a traditional IRA, you can effectively lower your tax liability and put yourself into a lower tax bracket today. That’s because these accounts are funded using pre-tax dollars. If you fund a Roth IRA after retirement, you can allow your savings to grow tax-free because you contribute after-tax money to it.


One of the main cons of contributing to an IRA during retirement is affordability. You’re probably on a fixed income, even if you still have wages coming in. But it may not be that much. Putting aside money when you have limited funds may end up eating away at your monthly budget, which means you may have to make some sacrifices.

Contributing also chips away at any emergency fund you can access. After all, you don’t know what will happen in the future. Putting your money into an IRA when you’ve already retired may mean locking it in for a certain amount of time. You may be better off putting that money into a savings account or a CD—something easy to liquidate if you need it in a hurry or for an emergency.

Can You Open a New IRA If You Are Retired?

There is no age limit for opening an IRA, which means you can open an account even after you retire. Keep in mind that contributions can only come from earned income. You may also choose to transfer or roll funds over from an eligible retirement account you already have. There are also contribution limits that you must adhere to avoid being charged a penalty by the IRS.

Can You Continue Funding an IRA If You Are Retired?

You can contribute and continue funding an IRA after retirement. This applies to both Roth and traditional IRAs. Prior to the passing of the SECURE Act, individuals could not contribute to traditional IRAs after age 70½. There were and are no age restrictions to contributing to a Roth IRA. If you fund your IRA after retirement, you must keep the maximum contribution limits in mind. If you go over these limits, you will be charged a penalty of 6% on the overfunded amount until it is corrected.

Can You Contribute to a Roth IRA After Retirement?

Yes, you can contribute to a Roth IRA after you retire. You can only contribute earned income to the account, so you cannot set aside distributions from other retirement accounts, dividends, or interest income. You may contribute to your Roth IRA as long as you don’t exceed the maximum annual contribution limits.

Can You Contribute to an IRA if You Are on Social Security?

Yes, you can continue contributing to an IRA even if you begin collecting Social Security benefits. But any money from your monthly benefits can’t be contributed because Social Security isn’t considered earned income. You can only contribute money to your IRA that you earn from a job.

The Bottom Line

Retirement planning is essential for anyone who wants to secure their financial future. You want to ensure that you’re not struggling to keep up your lifestyle and standard of living. But what happens if you’ve already retired and no longer have any compensation? There is still a way that you can contribute.

If your spouse continues to work and has earned income, they can establish and fund a Roth IRA for you even if you’re not actively working. This spousal Roth IRA must be in your name, even if your spouse is the one making the contributions.

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