IRA Withdrawal Patterns in Times of Crisis

One of the provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act that affects retirees is the waiver of required minimum distributions (RMDs) for 2020. The waiver, which applies to all 401(k) and individual retirement account (IRA) owners, provides flexibility so that retirees can avoid liquidating assets at low prices and preserve their assets. In this Issue Brief, we explore historical IRA withdrawal patterns of older Americans, including those taking only RMDs and those taking distributions that exceed the RMD level. We look at prior crises, such as the Great Recession of 2008–2009, to see how withdrawal patterns were affected by both financial hardships and RMD waivers during that time.