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Reinvesting a required minimum distribution (RMD) into a Roth IRA isn’t allowed directly, since RMDs are considered taxable income. However, if you have earned income and fall within the IRS income limits for Roth contributions, you can contribute to a Roth IRA using funds from any source, including money withdrawn to satisfy your RMD.
RMDs can potentially push you into a higher tax bracket. Work with a financial advisor to develop a tax strategy for managing these required withdrawals.
What Are RMDs and How Do They Work?
RMDs are mandatory withdrawals from certain tax-advantaged retirement accounts that begin at age 73 (75 for those born in 1960 or later). The IRS imposes these withdrawals to eventually collect taxes on money permitted to grow tax-deferred.
The amount of each RMD is based on the account balance at the end of the previous year and a life expectancy factor published by the IRS. The calculation resets annually. You must take these withdrawals for each account subject to RMD rules, though individuals with multiple IRAs may aggregate their RMDs. Failing to take an RMD can result in a steep penalty: 25% of the amount not withdrawn, reduced to 10% if corrected on time.
RMDs apply only to pre-tax retirement accounts, such as traditional IRAs, 401(k)s and 403(b)s. Roth IRAs and Roth 401(k)s are not subject to RMDs during the original owner’s lifetime.
Can You Reinvest Your RMD into a Roth IRA?
While you cannot roll RMDs directly into a Roth IRA, there are ways to move equivalent funds into a Roth if you meet specific requirements. Understanding how this works requires looking at Roth contribution rules, income limits and the concept of earned income.
Once you take your RMD, that money is yours to use however you like, including making a Roth IRA contribution. The key limitation is that you can only make Roth IRA contributions with earned income, such as wages, salaries or self-employment income. Passive income, pension payments and the RMD itself do not count as earned income. If you’re retired and no longer working, you likely won’t qualify to contribute to a Roth IRA.
For example, say you’re 74 and earning $20,000 a year from part-time consulting work. You could contribute up to $8,600 to a Roth IRA in 2026, assuming you are 50 or older and your income falls within the IRS limits. You could use funds from your RMD to contribute, since Roth IRA rules don’t require that the contribution comes directly from your paycheck—only that you have enough earned income to justify it.
On the other hand, if you’re fully retired and your only income comes from Social Security and retirement account withdrawals, including RMDs, you wouldn’t be eligible to contribute to a Roth IRA. The IRS doesn’t consider those sources as earned income, which is a requirement for making new Roth contributions.
Roth IRA Contribution and Income Limits 2026
To indirectly reinvest RMD funds into a Roth IRA, you must first qualify to contribute to a Roth IRA. This entails meeting both the income thresholds and the contribution limits set by the IRS.
The contribution limits in 2026 for both traditional and Roth IRAs are:
- $7,500 for those under the age of 50
- $8,600 for those 50 and older
These limits apply regardless of where the funds come from. However, you must have earned income that is at least equal to the amount you contribute. For example, even if your RMD is $15,000, you can only contribute up to $8,600 if you are 50 or older, and only if you have at least $8,600 in earned income.
Additionally, to make the full allowed contribution, your modified adjusted gross income (MAGI) can’t exceed thresholds set by the IRS. If your MAGI falls within certain ranges, the amount you’re allowed to contribute begins to phase out. Once your income exceeds the upper limit, you can’t contribute to a Roth IRA directly.
The following Roth IRA income limits apply for 2026:
2026 Roth IRA Income Limits
| Filing Status | MAGI for Full Contribution | MAGI for Partial Contribution | No Contribution |
|---|---|---|---|
| Single/Head of Household | Less than $153,000 | $153,000-$168,000 | $168,000 and over |
| Married Filing Jointly | Less than $242,000 | $242,000–$252,000 | $252,000 and over |
| Married Filing Separately | N/A | Up to $10,000 | $10,000 and over |
These limits are important to note because RMDs count as taxable income and increase your MAGI. If your income is already close to the threshold, taking an RMD could push you over the limit. This would disqualify you from contributing to a Roth IRA, even if you have sufficient earned income. Planning, such as by reducing MAGI through charitable giving or qualified deductions, may help preserve eligibility in some cases.
Alternative Ways to Grow Withdrawn RMD Funds
If you can’t reinvest your RMD directly into a Roth IRA, you still have several ways to keep the money working for you:
1. Taxable Brokerage Accounts
You can invest your RMD funds in stocks, bonds, ETFs or mutual funds through a taxable brokerage account. While dividends, interest and capital gains may generate tax liabilities, this option offers flexibility with no contribution limits or early withdrawal rules. Tax-efficient investing strategies, such as focusing on index funds or municipal bonds, can help reduce ongoing tax costs.
2. Tax-Deferred Annuities
Some retirees purchase deferred annuities with their RMDs. This can create another source of tax-deferred growth and later generate lifetime income. Keep in mind, however, that annuities often have higher fees and surrender charges. It’s important to evaluate carefully whether the stability is worth the trade-offs.
3. Health Savings Accounts (HSAs)
If you’re still working and eligible for an HSA, you could use RMD funds to free up other dollars for HSA contributions. HSAs are triple tax-advantaged: Contributions are deductible, growth is tax-deferred and qualified withdrawals for healthcare expenses are tax-free. This can be a valuable way to offset future medical costs.
4. 529 College Savings Plans
For those who want to help children or grandchildren with education costs, contributing RMD money to a 529 plan allows it to grow tax-free. Withdrawals for qualified expenses are also tax-free. In addition, some states offer state income tax deductions or credits for 529 contributions.
5. Paying Down Debt
If you carry high-interest debt, applying RMD money toward repayment can generate a guaranteed return equivalent to the interest you would have paid. This is especially impactful if you still hold mortgage, credit card or personal loan balances.
6. Charitable Giving
Another option is to donate withdrawn RMD funds to causes that you support. While you won’t avoid recognizing the income, you may qualify for an itemized deduction that offsets part of the tax burden.
How to Avoid RMDs
While RMDs are mandatory for most tax-deferred retirement accounts, some strategies can reduce or even eliminate them. These approaches generally involve account conversions, specific account types or qualified transfers. For instance, you may consider:
- Roth IRA conversions: Moving funds from a traditional IRA or 401(k) into a Roth IRA eliminates future RMDs from those assets. This is since Roth IRAs aren’t subject to RMDs during the original owner’s lifetime.
- Still-working exception: If you’re still employed and contributing to a 401(k) with your current employer, you may be able to delay RMDs from that specific plan.
- Qualified charitable distributions (QCDs): For IRA owners age 70 ½ or older, donating up to $111,000 directly to charity in 2026 can satisfy part or all of an RMD without increasing taxable income.
If you don’t explore a strategy for avoiding RMDs, you’ll want to have a clear idea of how much you’ll be required to withdraw. SmartAsset’s RMD calculator can help you estimate your required distribution.
Required Minimum Distribution (RMD) Calculator
Estimate your next RMD using your age, balance and expected returns.
RMD Amount for IRA(s)
RMD Amount for 401(k) #1
RMD Amount for 401(k) #2
About This Calculator
This calculator estimates RMDs by dividing the user's prior year's Dec. 31 account balance by the IRS Distribution Period based on their age. Users can enter their birth year, prior-year balances and an expected annual return to estimate the timing and amount of future RMDs.
For IRAs (excluding Roth IRAs), users may combine balances and take the total RMD from one or more accounts. For 401(k)s and similar workplace plans*, RMDs must be calculated and taken separately from each account, so balances should be entered individually.
*The IRS allows those with multiple 403(b) accounts to aggregate their balances and split their RMDs across these accounts.
Assumptions
This calculator assumes users have an RMD age of either 73 or 75. Users born between 1951 and 1959 are required to take their first RMD by April 1 of the year following their 73rd birthday. Users born in 1960 and later must take their first RMD by April 1 of the year following their 75th birthday.
This calculator uses the IRS Uniform Lifetime Table to estimate RMDs. This table generally applies to account owners age 73 or older whose spouse is either less than 10 years younger or not their sole primary beneficiary.
However, if a user's spouse is more than 10 years younger and is their sole primary beneficiary, the IRS Joint and Last Survivor Expectancy Table must be used instead. Likewise, if the user is the beneficiary of an inherited IRA or retirement account, RMDs must be calculated using the IRS Single Life Expectancy Table. In these cases, users will need to calculate their RMD manually or consult a finance professional.
For users already required to take an RMD for the current year, the calculator uses their account balance as of December 31 of the previous year to compute the RMD. For users who haven't yet reached RMD age, the calculator applies their expected annual rate of return to that same prior-year-end balance to project future balances, which are then used to estimate RMDs.
This RMD calculator uses the IRS Uniform Lifetime Table, but certain users may need to use a different IRS table depending on their beneficiary designation or marital status. It's the user's responsibility to confirm which table applies to their situation, and tables may be subject to change.
Actual results may vary based on individual circumstances, future account performance and changes in tax laws or IRS regulations. Estimates provided by this calculator do not guarantee future distribution amounts or account balances. Past performance is not indicative of future results.
SmartAsset.com does not provide legal, tax, accounting or financial advice (except for referring users to third-party advisers registered or chartered as fiduciaries ("Adviser(s)") with a regulatory body in the United States). Articles, opinions and tools are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual. Users should consult their accountant, tax advisor or legal professional to address their particular situation.
Frequently Asked Questions
Can I roll over my RMD to a Roth?
No. You cannot roll over RMDs into a Roth IRA or any other retirement account. Once the money is withdrawn, it’s considered taxable income and is no longer eligible for rollover treatment.
What is the best way to reinvest my RMD?
If you’re eligible to contribute to a Roth IRA, you can reinvest your RMD indirectly by using the withdrawn funds for a Roth contribution. To do so, however, you must have enough earned income and your income must fall within the IRS limits.
What is the biggest RMD mistake?
One of the most common mistakes is failing to take the full RMD by the deadline. This can trigger a penalty equal to 25% of the amount not withdrawn, though that penalty may be reduced to 10% if corrected promptly. Misunderstanding which accounts require RMDs or how to aggregate them is another frequent error.
Bottom Line
You can’t roll an RMD directly into a Roth IRA. That said, it’s possible to contribute an equivalent amount if you have earned income and meet the IRS income limits. This approach won’t reduce your current tax bill, but it can shift future growth into a tax-free account. For retirees with qualifying income, it’s one way to extend the long-term benefits of money that you have to withdraw.
Tips for Retirement Planning
- Retirement planning brings a lot of questions and takes the right expertise to make sure you’re planning toward your long-term goals. A financial advisor can help you with everything from creating a savings plan to helping you navigate the various retirement accounts and your options, based on your situation. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Using a retirement calculator can help you get started on your path by estimating how much money you might need to save for retirement.
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