I am self-employed and do not need most of my IRA RMD for expenses. Can I reinvest it in Roth IRAs?
You can use your required minimum distributions (RMDs) to fund your Roth IRA as a Roth IRA contribution. This is because the source from which you take the cash to fund your IRA can be from any pool of cash that you have. The IRS' requirement is that you have enough taxable compensation to cover the contribution, but the actual deposit of your contribution need not come directly from your paycheck.
If you can afford to pay the taxes, you may want to think about converting your Traditional IRA to your Roth IRA. Once the funds are in the Roth IRA, you will no longer be required to withdraw RMD amounts. Of course, you should check with your tax professional to determine whether a conversion would be a good financial move for you, as there are other factors to consider other than the RMD issue. If you do decide to convert to a Roth IRA, remember to take your RMD for the year you convert before the conversion.
To learn more, read Avoiding RMD Pitfalls.
This question was answered by Denise Appleby.