The Effects of Required Minimum Distribution Rules on Withdrawals from Traditional IRAs
57 Pages Posted: 21 Apr 2016 Last revised: 20 Jul 2019
Date Written: July 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 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: Suggested Citation