Can I Move My Required Minimum Distributions Into a Roth IRA?

Core Insights - Investors must begin taking required minimum distributions (RMDs) from tax-deferred accounts at age 73 or 75, depending on their birth year, which can result in significant cash that may not be needed for living expenses [1][2] - A Roth IRA is suggested as a suitable option for reinvesting unneeded RMD cash due to its tax-free withdrawals and exemption from RMDs during the account holder's lifetime [1] Group 1: RMDs and Roth IRA Contributions - Direct conversion of RMDs to a Roth IRA is not allowed, but individuals can contribute to a Roth IRA if they have sufficient earned income, with a contribution limit of $7,000 plus an additional $1,000 for those aged 50 and above for 2024 [2] - Earned income includes wages, commissions, bonuses, and self-employment income, while it excludes pension payments, interest, dividends, rental income, and other non-qualifying sources [3] Group 2: Income Limits and Withdrawal Rules - Roth IRA contributions are subject to income limits, with phase-out starting at a modified adjusted gross income (MAGI) of $146,000 for single filers and $230,000 for joint filers, becoming ineligible after $161,000 and $240,000 respectively [4] - A five-year waiting period is required after the first contribution to a Roth account before withdrawals can be made, and heirs must withdraw the entire balance within 10 years [5] Group 3: Alternatives to Roth Contributions - For those unable to contribute to a Roth IRA, options exist to eliminate, reduce, or delay RMDs, including converting an IRA to a Roth account after taking the RMD for the year, with taxes applicable on the converted amount [6]