IRA owners over the age of 70 ½ are required to begin making regular withdrawals from their account, and a report by EBRI found that’s the main reason withdrawals are made at all.
“For traditional IRAs, the overwhelming number of people that are taking withdrawals from them are because they have to under the RMD rules, and for the most part the amount of the withdrawal is only the amount they are required to take out,” Craig Copeland, EBRI senior research associate and author of the report, said in a statement.
Over half of people who took withdrawals in 2015 were over age 71, the report found. Just over a quarter of people 71 or older took a larger withdrawal than what they were required. Less than 12% of people under age 50 took a withdrawal from an IRA in 2015.
As further evidence of RMD rules being a major force behind withdrawal decisions, only 19% of people who took a withdrawal owned a Roth IRA, which aren’t subject to RMD rules.