TL;DR: Understanding do Roth IRAs have RMDs is key to making smarter retirement and tax planning decisions. This blog breaks down how RMDs and Roth conversions work, what rules you must follow, and how to avoid costly mistakes while maximizing tax efficiency.
Main points:
- Why Roth IRAs do not have RMDs during the original owner’s lifetime—and what that means for long-term growth
- The difference between RMDs and Roth conversions, and why a conversion does not count as an RMD
- Key rules like taking your RMD first before completing a Roth conversion
- How the SECURE Act impacts RMD age requirements and the 10-year rule for beneficiaries
- Strategies to reduce tax impact, including timing withdrawals and using Roth conversions effectively
Getting the most out of your retirement savings can be tricky. This is especially true when determining your required minimum distributions (RMD) for your IRA. Sometimes you don't need your RMDs, but the rules of your retirement account force you to take them. You might be wondering, "does a Roth conversion count as an RMD?"
The answer is simple: no. A Roth conversion does not count as an RMD. A Roth conversion doesn't satisfy the RMD requirements of the IRS.
The reason for this is that an RMD and Roth conversion serve different purposes. This also means that they are subject to different rules.
Why Doesn’t a Roth Conversion Count as an RMD? (What Accounts Do You Have to Take RMDs From?)
What does an RMD mean? Required minimum distributions (RMDs) are mandated by the IRS for traditional IRAs and some other retirement plans. Individuals must make withdrawals once they meet the RMD age requirements. This often leads to the question, “what accounts do you have to take RMDs from?”
Roth conversions serve a different purpose than an RMD. Roth conversions are voluntary transactions where you transfer your funds from one of these accounts to a Roth IRA:
- a traditional IRA
- SEP IRA
- SIMPLE IRA
- Employer-sponsored plans like a 401k
They do not apply to Roth IRAs during the account holder’s lifetime.
When Do RMDs Start?
This RMD age requirement started when recipients were 70.5 years old, but the SECURE Act increased the RMD age level. The SECURE Act raised this age to 72, then 73. It will eventually climb to age 75.
These delays in the RMD age requirement are a good thing. They can help you with savings. They can help you to plan effectively. The SECURE Act is a piece of legislation that shortened the payout timeline to 10 years.
This means that at the end of that 10-year period, the account balance is exhausted, and you could receive a balloon payment. The purpose of having RMDs is to ensure that you withdraw a part of your retirement savings. It also makes sure that you pay taxes on part of your tax-deferred retirement savings.
How to Calculate an RMD?
You can calculate the amount of your RMD by dividing your account balance by your estimated life expectancy. This process will involve paying taxes on the amount converted at your current ordinary income tax rate.
Do You Have to Take an RMD from a Roth IRA?
Still confused if you can use your RMD as a Roth conversion, or if you have to take an RMD from a Roth IRA? This should answer your question. These are two separate processes, so you can’t use your RMD as a Roth conversion. You must first take your RMD for the year before you pursue a Roth conversion.
Since they serve two distinctly different purposes, your Roth conversion doesn’t count as an RMD. Your RMD amount is actually not eligible for conversion because the IRS considers it a taxable distribution. A Roth conversion does not count as an RMD because of this. If you fail to take your RMD, it can result in a penalty of the amount you did not withdraw.
Can an RMD Be Converted to a Roth IRA?
There may still be confusion about how RMDs work. Do you find yourself asking, “Can an RMD be converted to a Roth account?” No, your RMD can’t be converted to a Roth IRA.
The IRS mandates that you first take the RMD for the year before you can perform a Roth conversion. The RMD amount is not eligible for conversion because the IRS considers it a taxable distribution.
Why The IRS Doesn’t Allow RMD Conversions
When you take an RMD, the IRS subjects it to ordinary income tax rates for the year you make the withdrawal. An RMD ensures that you pay taxes on your tax-deferred retirement savings after a certain age. If you were to attempt to convert an RMD to a Roth IRA, it would essentially allow you to bypass this tax requirement. This is why the IRS doesn’t allow it.
How Do Roth Conversions and RMDs Work Together?
If you are interested in pursuing a Roth conversion, you must satisfy your RMD for the year before you do that. Always remember that a Roth conversion doesn’t count as an RMD. Any amount you want to convert beyond the RMD is then eligible for a Roth conversion. Of course, this assumes that it meets the required criteria for a Roth conversion.
Roth IRA Contribution Limits and Income Requirements
For the current tax year, you can contribute up to $7,000 annually to your IRAs, or $8,000 if you are age 50 or older. These limits apply to the combined total of contributions made to both traditional and Roth IRAs.
Eligibility to contribute directly to a Roth IRA depends on your income. For 2026, the IRS continues to apply income phase-out ranges similar to recent years:
- Single filers: Contributions begin to phase out at $146,000 and are eliminated at $161,000
- Married filing jointly: Phase-out begins at $230,000 and ends at $240,000
If your income falls within these ranges, your contribution limit may be reduced. If it exceeds the upper limit, you may not be eligible to contribute directly to a Roth IRA.
The IRS requires that sufficient earned income should cover your Roth IRA contribution for the year. However, the good news is that the actual source of the contribution doesn't need to be from your paycheck..
How to Avoid Taxes on an RMD
In most cases, you cannot completely avoid taxes on an RMD. RMDs are treated as taxable income by the IRS.
Keep in mind that whatever the amount you convert to a Roth IRA, the IRS will treat it as taxable income. It will be taxable for the year in which the conversion occurs. You'll need to pay taxes at your current ordinary income tax rate.
While you can’t fully avoid taxes, you may be able to reduce the impact through planning strategies such as:
- Timing withdrawals to stay in a lower tax bracket
- Using Roth conversions before RMD age
- Donating through Qualified Charitable Distributions (QCDs), if eligible
Can I Put My RMD into a Roth IRA?
Yes, you can reinvest your RMD into a Roth IRA, but this depends on your circumstances. You can put your RMD in a Roth IRA if you are eligible to make direct contributions to a Roth IRA. This typically means you are below the IRS income limits. One of the main reasons people opt for a Roth IRA conversion is to get away from the RMD requirements.
If you are not eligible to make direct contributions to your Roth IRA, then you can’t put your RMD into a Roth IRA. You must still withdraw your finds one you meet the RMD age requirements. However, you can use a strategy like a Roth conversion ladder. Tactics like this allow you to eventually move all your funds to a Roth IRA over time.
While you must still take your RMDs, you can invest them in other financial instruments like mutual funds or stocks.
Why Are Roth Conversions Beneficial?
Roth conversions are an attractive process because Roth IRAs grow tax-free and qualified withdrawals are also tax-free. Roth IRAs don’t have RMDs, so you can just let your contributions grow tax-free. If you pass away and your heirs inherit your IRA, they won’t have to pay taxes on distributions.
Roth IRAs are important because they can help those who take advantage of Social Security benefits. Social Security benefits are taxable once you hit the income threshold. Roth IRAs won’t take you beyond that threshold. Completing a Roth conversion before you start getting your Social Security benefits can help you save money.
When Does an RMD Stop?
RMDs from retirement accounts stop at the account holder's passing. They don't stop at any specific age. If you're wondering “at what age does RMD stop?” the answer is that they continue for your entire life. The required RMD age is currently 73, because of the SECURE 2.0 Act.
RMDs exist to make sure people withdraw at least some of their tax-deferred savings. This means the government can collect taxes on this money. Without RMDs, you might leave your savings untouched forever, which would delay tax payments. RMDs get a lot of pushback, but they can be helpful in some cases.
They provide a structure for how much you should withdraw each year. This can prevent you from spending your retirement savings too quickly. They also encourage you to use your retirement savings for your retirement, not just keep it forever. Since there is no end RMD age, it prevents hoarding wealth in retirement savings.
However, RMDs can also have drawbacks. They might push you into a higher tax bracket when you meet the RMD age, especially if you have a lot of retirement savings. This could mean a bigger tax bill at a time when you don’t have a salary or consistent generation of income.
Also, once you take the money out, it's no longer growing in your retirement account. This reduces the overall growth of your savings. RMDs also take away some flexibility in how you manage your finances. This is because you must withdraw money even if you don't need it at that time.
Options for Reinvesting or Converting an RMD You Don’t Need
If you have an RMD and you are looking to do something with it, then you can explore options like a 529 savings plan. However, if you are looking to do it yourself, you need to be aware of consequences.
You need to consider penalties like IRMAA (income-related monthly adjustment amounts). This is a Medicare penalty that higher-income individuals need to pay. The penalty is for Medicare Part B (medical insurance) and Medicare Part D (prescription drug coverage).
Consulting with a financial advisor or tax advisor can help you determine what strategies you should take. It would allow you to choose a Roth conversion or explore RMD reinvestment options. You need to have the right strategy for your specific financial situation.
Talk to the Professionals at Asset Preservation Wealth & Tax
Frequently Asked Questions
Are RMDs ever required from a Roth IRA?
No, RMDs are not required from a Roth IRA during the original owner’s lifetime. Roth accounts let your money grow tax-free for as long as you live. However, beneficiaries who inherit a Roth IRA may still be subject to distribution rules, depending on their relationship to the original owner.
What is the biggest RMD mistake?
One of the biggest RMD mistakes is failing to take the required distribution on time or withdrawing the wrong amount. Missing an RMD can result in significant penalties. Another common mistake is not planning, taking large distributions all at once can push you into a higher tax bracket. Proper planning can help minimize taxes and avoid unnecessary penalties.
What is the 10-year rule for Roth IRAs?
The 10-year rule applies to many non-spouse beneficiaries who inherit a Roth IRA. It requires that the entire account be withdrawn by the end of the 10th year following the original owner’s death. While withdrawals are generally tax-free, the timing of those withdrawals still matters for long-term planning and growth.
A Roth conversion may not be suitable for your situation. The primary goal in converting retirement assets into a Roth IRA is to reduce the future tax liability on the distributions you take in retirement, or on the distributions of your beneficiaries. The information provided is to help you determine whether or not a Roth IRA conversion may be appropriate for your particular circumstances. Please review your retirement savings, tax, and legacy planning strategies with your legal/tax advisor to be sure a Roth IRA conversion fits into your planning strategies.
Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims paying ability of the issuing company; not guaranteed by any bank or the FDIC.
Stewart Willis is the founder and president of Asset Preservation Wealth & Tax, a financial planning firm in Phoenix, Arizona. Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser.
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