Ask the Expert: Can an RMD be reinvested in a Roth IRA?
I know I must take taxable distributions from my IRA starting at age 73. Can I take the required minimum distribution (RMD), pay the taxes, and then reinvest the money in a Roth IRA?
Yes, but only if you take the RMD withdrawal and make the Roth contribution in two separate and distinct steps.
There’s a lot of understandable confusion about the age at which people must start taking RMDs, which is slowly rising. For those born in 1951, it’s age 73. They will turn 73 in 2024. The deadline for taking your first RMD is April 1 of the year AFTER you turn 73 — so April 1, 2025, said Ed Slott, a Rockville Centre tax accountant. (If you were born in 1950 or earlier, stay on your old RMD schedule!)
You can't transfer your RMD into a Roth IRA. The right way to accomplish your goal is to 1) transfer what’s left of the RMD after taxes into a taxable bank or money market account, and 2) transfer money from that taxable account into the Roth IRA.
Bear in mind that you must have earned income to make a Roth contribution and can’t contribute more than you earned. The maximum 2023 Roth contribution for people 50 and older is $7,500. Single taxpayers with income up to $138,000 and married taxpayers filing jointly with income up to $218,000 can contribute the maximum amount. You can’t contribute at all if your income is $153,000 or more (single) or $228,000 or more if you’re married filing jointly.
The bottom line
You can’t directly transfer your RMD to a Roth IRA. But you can transfer money from a non-IRA account to a Roth IRA, assuming you meet Roth eligibility requirements.
More information
An RMD can be transferred into a taxable bank or money market account after the taxes on it are paid, and then transferred from that taxable account into a Roth IRA. The information was unclear in a previous version of this story.
