Contributing to Retirement Accounts When You Haven't Fully Retired
Some part-timers can keep socking money in a 401(k) and avoid required minimum distributions. It depends on your plan's rules.
Question: If I "retire" from full-time work but continue with the same employer part-time, can I still contribute to my company's 401(k), or do I have to stop at age 70½? Also, can I avoid having to take RMDs at age 70½ because I’m still working there, or do I need to work a certain number of hours to qualify?
Answer: Employers can't prevent employees from participating in their 401(k)s just because they reach a certain age, so you should be able to contribute even after age 70½ if you qualify otherwise. However, some employers let part-time workers participate in their 401(k)s while others do not, and the number of hours required to be eligible can vary by employer, too, says Keith McGurrin, a certified financial planner with T. Rowe Price.
Whether or not you're still working, you'll need to start taking RMDs from your traditional IRAs after you turn 70½. You can't make new contributions to traditional IRAs after age 70½, but you can contribute to a Roth IRA at any age if you have earned income from a job.