If they don't have to, they're not doing it: most individual retirement account owners are not making withdrawals from their IRAs unless obliged to by law because of their age.
Those are the most recent findings from the IRA database of the Employee Benefit Research Institute. Data indicated that only slightly more than 22 percent of those who have either a Roth or a traditional IRA took a withdrawal in 2013.
Most of those withdrawals went to individuals aged 70.5 or older who owned traditional IRAs. That group must make withdrawals under federal required minimum distribution (RMD) rules for IRA owners who have reached that age group.
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The difference is striking: among people younger than age 60, 10 percent or fewer made a withdrawal.
According to EBRI's analysis, for those at the RMD age, the median (half above and half below) withdrawal rate appeared close to the amount that was required to be withdrawn; however, some people had significantly higher rates. A consistent sample of IRA owners in the database from 20102013 indicated that approximately 25 percent of those 71 or older took a withdrawal amount greater than that required by law for traditional IRAs.
The study noted that the withdrawal rates it found appear to be sustainable for older owners of IRAs; however, the study said that further research is needed to be sure.
There was a striking difference between withdrawals taken by owners of traditional IRAs and those who owned Roths. Although a little over 80 percent of the individuals examined in the database owned traditional IRAs, 95.6 percent of the individuals who took a withdrawal were traditional IRA owners. Just 18.2 percent of those who took a withdrawal owned a Roth IRA. The disparity between the withdrawal rates between the IRA types was due almost entirely to the required minimum distribution (RMD) rules that apply to traditional IRAs but not to Roth IRAs
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