The Effects of Required Minimum Distribution Rules on Withdrawals from Traditional IRAs
42 Pages Posted: 21 Apr 2016 Last revised: 28 Feb 2019
Date Written: February 2019
We study the effects of Required Minimum Distribution (RMD) rules on the asset decumulation behavior of retirees with Traditional Individual Retirement Arrangements (IRAs). Using a nationally representative panel of 1.8 million IRA holders from 2000 to 2013, we estimate that between 32 to 52 percent of individuals would prefer to withdraw less than their required minimum. However, we also estimate that up to 38 percent of these RMD-constrained individuals did not respond to a temporary suspension of RMD rules in 2009.
An online appendix for "The Effects of Required Minimum Distribution Rules on Withdrawals from Traditional Individual Retirement Accounts" may be found at http://ssrn.com/abstract=2859088.
Keywords: Asset decumulation, income taxation, Individual Retirement Accounts, investment, required minimum distributions, retirement
JEL Classification: D14, H24
Suggested Citation: Suggested Citation