Can I Put My RMD Into a Roth IRA?

Individuals nearing or in retirement often consider how their savings will be managed, especially concerning required distributions and tax-advantaged accounts. A common question arises about the interplay between Required Minimum Distributions (RMDs) and Roth Individual Retirement Accounts (IRAs). This article clarifies the relationship between RMDs and Roth IRAs, specifically addressing the possibility of transferring funds between them.

Understanding Required Minimum Distributions (RMDs)

Required Minimum Distributions (RMDs) are amounts individuals must withdraw annually from most retirement accounts once they reach a certain age. The purpose of RMDs is to ensure taxes are paid on money that has grown tax-deferred. These distributions apply to traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k)s, and 403(b)s, among other pre-tax retirement plans.

The age for RMDs has changed due to legislative acts. Initially 70½, the SECURE Act of 2019 increased this age to 72, and the SECURE 2.0 Act of 2022 further raised it to 73 for those turning 73 in 2023 or later. For individuals born in 1960 or later, the RMD age will increase to 75 starting in 2033. RMDs are calculated based on the account balance at the end of the previous year and the account holder’s life expectancy, using IRS tables.

RMDs are considered ordinary income and are fully taxable in the year received, unless they represent after-tax contributions previously made to the account. Failing to take the full RMD by the deadline can result in significant penalties. The IRS may impose an excise tax of 25% on the amount not withdrawn. This penalty can be reduced to 10% if the RMD shortfall is corrected within two years.

Understanding Roth IRAs

Roth IRAs are retirement accounts with unique tax treatment. Contributions are made with after-tax dollars, meaning income tax has already been paid. This upfront taxation allows qualified withdrawals, including both contributions and earnings, to be entirely tax-free in retirement.

To contribute to a Roth IRA, an individual must have earned income, and contributions are subject to annual limits. For 2025, the maximum contribution limit is $7,000 for individuals under age 50, and $8,000 for those age 50 and older, including a catch-up contribution. These limits are periodically adjusted for inflation.

Eligibility to contribute to a Roth IRA is also determined by Modified Adjusted Gross Income (MAGI) limitations, which can phase out or prevent direct contributions for higher-income earners. For instance, in 2025, single filers with a MAGI of $150,000 or more, or joint filers with a MAGI of $236,000 or more, may face reduced or eliminated contribution eligibility. A Roth IRA’s principle is to “pay taxes now, withdraw tax-free later,” differentiating it from pre-tax accounts subject to RMDs.

Directly Transferring RMDs to a Roth IRA

A Required Minimum Distribution (RMD) cannot be directly rolled over or contributed into a Roth IRA. This is due to the difference in how these accounts are taxed and funded. RMDs are distributions of pre-tax money from tax-deferred accounts, fully taxable upon receipt.

Roth IRAs, conversely, accept only after-tax contributions. Once an RMD is taken from a traditional retirement account, it becomes taxable income to the individual in that year. The funds are then part of the individual’s general assets, no longer held within a tax-deferred retirement structure.

Any subsequent movement of these funds into a Roth IRA would be treated as a new after-tax contribution, not a direct transfer of the RMD. This new contribution would be subject to all standard Roth IRA contribution rules, including the requirement for earned income and adherence to applicable Adjusted Gross Income (AGI) limits. The RMD must first be fulfilled and taxed before any portion of those funds can be considered for a Roth IRA contribution.

Navigating RMDs and Roth IRA Contributions

While a direct transfer of an RMD into a Roth IRA is not permitted, individuals can still manage their RMDs and make contributions to a Roth IRA. After taking their RMD from a pre-tax retirement account and paying associated taxes, those funds become part of their spendable income. If the individual meets Roth IRA contribution eligibility, such as having earned income and staying within Modified Adjusted Gross Income (MAGI) limits, they can contribute other after-tax funds from savings or investments into a Roth IRA. This is a separate transaction from the RMD, allowing continued utilization of the Roth IRA’s tax-free growth and withdrawal benefits.

For charitably inclined individuals subject to RMDs, Qualified Charitable Distributions (QCDs) offer a strategy. A QCD allows individuals to transfer funds directly from their IRA to a qualified charity, and this distribution can count towards satisfying their RMD for the year. The benefit of a QCD is that the transferred amount is not included in taxable income, potentially reducing Adjusted Gross Income (AGI) and overall tax liability.

To be eligible for a QCD, an individual must be at least 70½ years old at the time of distribution, which is younger than the current RMD age of 73. The annual limit for QCDs is adjusted for inflation; for 2025, an individual can contribute up to $108,000. QCDs can only be made from traditional, SEP, and inactive SIMPLE IRAs directly to a qualified public charity. They cannot be made from 401(k)s, 403(b)s, or Roth IRAs, nor directed to donor-advised funds or private foundations. This strategy allows individuals to fulfill their RMD requirement tax-efficiently while supporting charitable causes, without involving a Roth IRA in the distribution process.