 The effect of required minimum distributions on intergenerational transfersJournal of Public Economics, 2024, vol. 232, issue C Abstract: Tax policy may influence intergenerational transfers, especially the method and timing of gifts. In this paper, I study how tax rules that mandate the decumulation of retirement savings accounts impact transfers from parents to children. Using data from the Health and Retirement Study and a regression discontinuity design, I estimate the causal effects of aging into Required Minimum Distribution (RMD) regulations, which mandate withdrawals from retirement accounts upon reaching a specified age. First, I establish the effects of RMDs on asset decumulation in my setting and show a sharp increase in withdrawals from Individual Retirement Accounts (IRAs). Next, I provide new evidence on the effects of RMDs on intergenerational transfers and show a concurrent, discontinuous increase in inter vivos gifts. The results indicate that some households ultimately use IRAs to facilitate within-family transfers, holding wealth in the tax-advantaged accounts until required to take distributions and then passing resources to children. Keywords: Tax policy; Intergenerational transfers; Retirement savings (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:232:y:2024:i:c:s0047272724000276 DOI: 10.1016/j.jpubeco.2024.105091 Access Statistics for this article Journal of Public Economics is currently edited by R. Boadway and J. Poterba More articles in Journal of Public Economics from Elsevier |
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