Ask Terry Questions Investing the RMD

Investing the RMD

By Terry Savage on March 29, 2024 |

Hi Terry: My understanding is that the RMD applies to Traditional IRAs and not Roth IRAs, does it make sense to transfer the annual RMD from my Traditional IRA into my Roth IRA? Thanks.

Terry Says

You can only contribute to a ROTH IRA if you have EARNED income from work. So if you’re retired, but still have earnings (not dividends or interest or SS) then you can make an IRA Contribution up to $8,000 if you have that much earned income. It doesn’t matter where the money “comes from” to make that contribution.
If you don’t have earned income, then just invest it or spend it — no restrictions –but you must pay taxes on that RMD!

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