Do Required Minimum Distribution 401(k) Rules Matter, and For Whom? Insights from a Lifecycle Model
Tax-qualified vehicles helped U.S. private-sector workers accumulate $25Tr in retirement assets. An often-overlooked important institutional feature shaping decumulations from these retirement plans is the “Required Minimum Distribution” (RMD) regulation, requiring retirees to withdraw a minimum fraction from their retirement accounts or pay excise taxes on withdrawal shortfalls. Our calibrated lifecycle model measures the impact of RMD rules on financial behavior of heterogeneous households during their worklives and retirement. We show that proposed reforms to delay or eliminate the RMD rules should have little effects on consumption profiles but more impact on withdrawals and tax payments for households with bequest motives.
-
-
Copy CitationVanya Horneff, Raimond Maurer, and Olivia S. Mitchell, "Do Required Minimum Distribution 401(k) Rules Matter, and For Whom? Insights from a Lifecycle Model," NBER Working Paper 28490 (2021), https://doi.org/10.3386/w28490.Download Citation
Published Versions
Vanya Horneff & Raimond Maurer & Olivia S. Mitchell, 2023. "Do Required Minimum Distribution 401(k) Rules Matter, and For Whom? Insights from a Lifecycle Model," Journal of Banking & Finance, . citation courtesy of 
Related
Topics
Programs
Working Groups
More from the NBER
In addition to working papers, the NBER disseminates affiliates’ latest findings through a range of free periodicals—the NBER Reporter, the NBER Digest, the Bulletin on Health, the Bulletin on the Economics of Alzheimer's, and the Bulletin on Entrepreneurship—as well as research spotlights, lectures, and panel videos.
