- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Opening a Roth IRA at 70 years old
Posted on 6/11/21 at 5:17 pm
Posted on 6/11/21 at 5:17 pm
Advice for my dad who is semi retired and wants to invest some money that’s just sitting in the bank. Would you open up a Roth IRA and max it before putting money in a brokerage account? I know there is no age restriction to open one but you can’t take out earnings tax free unless the fund is open 5 years. Thoughts?
8
Posted on 6/11/21 at 5:28 pm to saderade
The only reason to do this would be for tax free growth to leave behind for beneficiaries.
Posted on 6/11/21 at 6:13 pm to hob
I don’t think there are required minimum distributions for a Roth, so if pops lives a while he could make use of it himself. Would benefit from the untaxed gains staying in there to make more money for him until he decided to withdraw and pay the piper.
Posted on 6/11/21 at 6:14 pm to saderade
I would ask whether or not he will need the money in his lifetime.
If so, I personally would just stick to a brokerage account. That would be the most efficient.
If he’s doing it for fun, a Roth is fine and obviously tax efficient for any trading he may do. No gains, income, k-1’s, etc.
If he’s doing it to maybe pass an inherited Roth down to someone as part of his estate, sure. That could be a feeling of purpose for him. I think inherited Roth’s can carry on for 10 years for a non-souse beneficiary. I may be wrong but I think RMD’s and life expectancy tables for inherited Roth beneficiaries no longer apply post 1/2020. I think you now just get 10 years and it needs to close.
Good luck to him!
If so, I personally would just stick to a brokerage account. That would be the most efficient.
If he’s doing it for fun, a Roth is fine and obviously tax efficient for any trading he may do. No gains, income, k-1’s, etc.
If he’s doing it to maybe pass an inherited Roth down to someone as part of his estate, sure. That could be a feeling of purpose for him. I think inherited Roth’s can carry on for 10 years for a non-souse beneficiary. I may be wrong but I think RMD’s and life expectancy tables for inherited Roth beneficiaries no longer apply post 1/2020. I think you now just get 10 years and it needs to close.
Good luck to him!
Posted on 6/11/21 at 9:21 pm to saderade
I would talk to a professional. I would think tax free munis, or something like that would be better than a Roth depending on what his goals are.
I would assume he wants some return to beat inflation (which is looming for sure) but his risk tolerance is probably hella low.
I would assume he wants some return to beat inflation (which is looming for sure) but his risk tolerance is probably hella low.
Posted on 6/11/21 at 9:51 pm to saderade
Just open a vanguard account and pick a fund he is familiar with. Utilities, tech, etc.
Posted on 6/11/21 at 10:28 pm to saderade
Better than leaving extra money lying aroubd in taxable accounts.
Depends on what all he has. 5 years isn't that long, even for a 70 year old. He could live many years past 75 and a Roth would be advantageous
Depends on what all he has. 5 years isn't that long, even for a 70 year old. He could live many years past 75 and a Roth would be advantageous
Posted on 6/13/21 at 12:34 pm to saderade
quote:
Would you open up a Roth IRA and max it before putting money in a brokerage account?
I am struggling to think of a single drawback to this idea given his age.
Posted on 6/13/21 at 11:03 pm to saderade
You have to have earned income to contribute to an IRA I believe.
Posted on 6/14/21 at 9:49 pm to saderade
He needs earned income to contribute new funds. If he has 401k he can rollovee those funds into an IRA and then backdoor a Roth but that would be a taxable event at the income level.
Posted on 6/15/21 at 4:36 pm to slackster
quote:This is what I’m thinking as well. He does have earned income but it’s not a lot and is also receiving about 2k in social security a month.
am struggling to think of a single drawback to this idea given his age
Thanks for the advice everyone.
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News