ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -You can keep taking advantage of tax-deferred contributions regardless of your age, as long as you have earned income. But, you will be required to start taking Required Minimum Distributions for the year you turn age 73.

Detailed explanation-2: -Your IRA, the Tax Code, and You In order to guarantee that the benefits of IRAs are used solely for retirement, the IRS imposes age limits on these accounts. Unless users are willing to incur a 10% penalty, IRA assets are not accessible until age 59 and a half.

Detailed explanation-3: -Generally, early withdrawal from an Individual Retirement Account (IRA) prior to age 59½ is subject to being included in gross income plus a 10 percent additional tax penalty. There are exceptions to the 10 percent penalty, such as using IRA funds to pay your medical insurance premium after a job loss.

Detailed explanation-4: -Distributions of Roth IRA earnings are tax-free, as long as the Roth IRA has been open for more than five years and you are at least age 59 1/2, or as a result of your death, disability or using the first-time homebuyer exception.

Detailed explanation-5: -An individual attains age 59½ as of six calendar months after the 59th anniversary of the individual’s birth date. For example, if an individual’s date of birth was June 30, 1950, the 59th anniversary of such individual’s birth is June 30, 2009. Such individual attains age 59½ on December 30, 2009.