At a Glance | September 10, 2020 IRA Withdrawal Patterns in Times of Crisis The waiver of required minimum distributions (RMDs) for 2020 is one of the provisions of the CARES Act. EBRI looks at the Great Recession of 2008–2010 to explore the effects of a prior economic crisis and a similar policy on IRA withdrawal patterns. IRA WITHDRAWALS IRA Withdrawals, Households Ages 50–70 1 By Average Withdrawal Amount and as Percentage of IRA Balance Accountholders in the ages 50–70 cohort did not $40k 15% $36k $36k $33k $33k adjust their withdrawals $32k Average $28k relative to their account $27k Withdrawal $25k Amount balance during the 9.4% 9.2% 8.9% 8.6% 10.2% 7.6% 2008–2010 market downturn, Withdrawals 7.6% 8.0% as Percentage resulting in a larger proportion of IRA of balances being withdrawn. Balance $0 0% 2002 2004 2006 2008 2010 2012 2014 2016 RETIRED VS. NOT RETIRED Share of Households Aged 50–70 Making IRA Withdrawals Retired vs. Not-Yet-Retired Households The likelihood of an IRA 41% 40% 40% 39% withdrawal among retired 38% 35% 35% 35% 40% households went down during Retired the 2008 market downturn. Households 4035+39+35+38+40+35+41+ 0% 2002 2004 2006 2008 2010 2012 2014 2016 40% In contrast, the share of not-yet- Not Yet 15% 15% 15% retired households taking 13% 14% 11% 11% 10% Retired withdrawals from their IRA 11+1616+14+10+11+16+13+ increased in the same period. 0% 2002 2004 2006 2008 2010 2012 2014 2016 IMPACT OF RMD WAIVER IRA Withdrawals, Households Ages 71 and Up Share of Older Households Withdrawing No More Than Their RMD Biennial IRA withdrawal data show a drop in withdrawals of 80% 68% 67% 67% 65% 65% 63% 64% no more than the RMD amount 61% Share between 2008 and 2010. This Withdrawing can be attributed to households No More Than RMD Amount taking advantage of the 2009 RMD waiver. 65+67+6463+65+67+68+61+ 0% 2002 2004 2006 2008 2010 2012 2014 2016 1. In 2016 dollars. SOURCE: Zahra Ebrahimi, “IRA Withdrawal Patterns in Times of Crisis,” EBRI Issue Brief, no. 510 (Employee Benefit Research Institute, August 13, 2020). © 2020 EBRI This report is copyrighted by the Employee Benefit Research Institute (EBRI). You may copy, print, or download this report solely for personal and noncommercial use, provided that all hard copies retain any and all copyright and other applicable notices contained therein, and you may cite or quote small portions of the report provided that you do so verbatim and with proper citation. Any use beyond the scope of the foregoing requires EBRI’s prior express permission. For permissions, please contact EBRI at permissions@ebri.org.