The Effects of Required Minimum Distribution Rules on Withdrawals from Traditional IRAs

57 Pages Posted: 21 Apr 2016 Last revised: 20 Jul 2019

See all articles by Jacob Mortenson

Jacob Mortenson

Joint Committee on Taxation, US Congress

Heidi Schramm

Joint Committee on Taxation, U.S. Congress

Andrew Whitten

U.S. Department of the Treasury - Office of Tax Analysis (OTA)

Date Written: July 2019

Abstract

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 around 50 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.

The online appendix for this paper may be found at https://papers.ssrn.com/abstract=2859088.

Keywords: Asset decumulation, income taxation, Individual Retirement Accounts, investment, required minimum distributions, retirement

JEL Classification: D14, H24

Suggested Citation

Mortenson, Jacob and Schramm, Heidi and Whitten, Andrew, The Effects of Required Minimum Distribution Rules on Withdrawals from Traditional IRAs (July 2019). Available at SSRN: https://ssrn.com/abstract=2764435 or http://dx.doi.org/10.2139/ssrn.2764435

Jacob Mortenson

Joint Committee on Taxation, US Congress ( email )

502 Ford House Office Building
Washington, DC 20515
United States

HOME PAGE: http://www.jacobmortenson.com

Heidi Schramm (Contact Author)

Joint Committee on Taxation, U.S. Congress ( email )

H2-502 Ford House Office Building
Washington, DC 20515
United States

Andrew Whitten

U.S. Department of the Treasury - Office of Tax Analysis (OTA) ( email )

1500 Pennsylvania Ave., N.W.
Washington, DC 20220
United States

HOME PAGE: http://andrewwhitten.com

Register to save articles to
your library

Register

Paper statistics

Downloads
154
Abstract Views
1,045
rank
188,964
PlumX Metrics