- Additional IRA deduction – Older workers can defer paying income tax on more money, in comparison with younger people. They have to contribute to an individual retirement account.
- 401(k) catch-up contributions – Older workers that have access to a 401(k) plan are eligible to make catch-up contributions. Employees that are 50 years and older can defer paying income tax on $6,500 more than younger workers. They have to contribute that amount of money to a 401(k) plan, to be more specific, $26,000.
- No more early withdrawal penalty – Younger workers who used their retirement accounts are hit with a 10% early withdrawal penalty unless they use the money for a couple of specific purposes. Luckily, once you turn 60 years old, you can withdraw money from an IRA, no matter your reasons, without incurring the 10% tax.
- Qualified charitable distributions – Retirees are usually required to withdraw money from traditional retirement accounts and remunerate the resulting income tax bill. But if you don’t need the money, you can avoid income tax on withdrawals by simply making a qualified charitable distribution.
- Higher HSA contribution limit – Workers that have a high-deductible health plan are eligible for claiming a tax deduction on contributions to a health savings account.
- Free tax help – Older people can get the help they need with filing their taxes without having to pay any excessive hourly fee. The Tax Counseling for the Elderly program gives free tax assistance to those age 60 or older.
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