RMDs Hike IRA Withdrawal Rates, EBRI Finds

When Americans reach 70 ½ years of age they must begin to take a required minimum distribution, or RMD, from their traditional IRAs. A new report from the Employee Benefit Research Institute found RMDs are the main reason withdrawals are made at all.

According to EBRI’s seventh annual IRA Database, among IRA owners under 60 years of age, the highest percentage taking money out of an account for any age group was only 11.7 percent. The majority of withdrawal activity was among retirees, mostly at ages where withdrawals are required. In addition, just more than one-quarter of owners ages 71 or older withdrew an amount from their traditional IRAs in excess of their RMD.

EBRI found there were more withdrawals from traditional IRAs than from Roth IRAs, regardless of age.