Charitable donation from RMD

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CABob
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Charitable donation from RMD

Post by CABob »

Is anyone familiar with the process of making charitable donations from a Vanguard IRA RMD?
I find from Vanguard that the process is available:
Can I use my RMD to make a charitable contribution?
Yes. Distributions for charitable purposes can be used to satisfy your RMD requirement. For tax year 2011, you can make a tax-free distribution to charity of up to $100,000 per taxpayer.
but, I couldn't information about how to go about doing it as well as any limitations, i.e. minimum amounts, limits to organizations, etc.
Bob
sscritic
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Re: Charitable donation from RMD

Post by sscritic »

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CABob
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Re: Charitable donation from RMD

Post by CABob »

Thanks, but, I have looked at a number of the links and none seem to address the process of the donation through Vanguard. I have also searched the Vanguard site and could not find what I was looking for.
Bob
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BL
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Re: Charitable donation from RMD

Post by BL »

Yes, I have done this. In fact just yesterday I did a fairly small amount. In the past I had the amount of the RMD withdrawn as a QCD. Rather than deal with signature guarantees, I chose to do it by phone.

For amounts under $1000, a Retirement Specialist will arrange to have a check made out to a charity and sent to my address. I recall having to answer one private question which they come up with either from q&A ID info or "publicly available information" such as motor vehicle department information.

For greater amounts there are more of these questions and I believe a person with a different job title. I understand that setting up recurring withdrawals requires a written form and signature guarantee.

I believe any 503C organization is qualified. Not sure if that is the category for churches but I believe they are generally accepted. Vanguard does not verify this, they just report withdrawal on your 1099. I couldn't actually get a minimum from Vanguard, but the IRS maximum is $100,000.

You must keep records to defend it for the IRS. The words QCD will be written on the IRA withdrawal line where withdrawal is reported on your 1040 and it is not part of the income reported. The QCD expires at the end of this year unless congress extends it again.
sscritic
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Re: Charitable donation from RMD

Post by sscritic »

CABob wrote: Thanks, but, I have looked at a number of the links and none seem to address the process of the donation through Vanguard. I have also searched the Vanguard site and could not find what I was looking for.
The third result had the words Vanguard and form showing. I tried that one. It is less than one month old.
Naikansha wrote:Earlier I noted on another thread that the owner taking the RMD with a qualified charitable contribution had to submit a form to Vanguard to make that contribution, but today one of their retirement specialists said it may also be done by phone. As I wrote earlier, the check(s) to the charity (or charities) will be sent to the owner who then passes them on.
Form or phone, and sent to you. I think that covers the main points. Are you looking for something else?
gkaplan
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Re: Charitable donation from RMD

Post by gkaplan »

If I understand this correctly, if I made such a charitable donation from my entire RMD, I would not have pay taxes on the RMD. I assume then that I could not take a charity deduction on my Schedule B, is that correct?
Gordon
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BL
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Re: Charitable donation from RMD

Post by BL »

gkaplan wrote:If I understand this correctly, if I made such a charitable donation from my entire RMD, I would not have pay taxes on the RMD. I assume then that I could not take a charity deduction on my Schedule B, is that correct?
Correct, that is if you mean Schedule A.
SobeCane
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Re: Charitable donation from RMD

Post by SobeCane »

FYI - read this blog post yesterday on why it is better to make a charitable donation from appreciated stock, and not from RMD.

http://www.kitces.com/blog/archives/474 ... ities.html

Is his logic correct?
gkaplan
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Re: Charitable donation from RMD

Post by gkaplan »

BL wrote:
gkaplan wrote:If I understand this correctly, if I made such a charitable donation from my entire RMD, I would not have pay taxes on the RMD. I assume then that I could not take a charity deduction on my Schedule B, is that correct?
Correct, that is if you mean Schedule A.
Thanks, BL. (I did mean Schedule A. It's been so long since I have itemized, I forgot what Schedule A was for and what Schedule B was for.)
Gordon
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bertilak
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Re: Charitable donation from RMD

Post by bertilak »

Is there a material difference between
  • RMD -> charity
and
  • RMD -> checking account -> charity
Are taxes treated differently?
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
kaneohe
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Re: Charitable donation from RMD

Post by kaneohe »

bertilak wrote:Is there a material difference between
  • RMD -> charity
and
  • RMD -> checking account -> charity
Are taxes treated differently?
possibly........suppose you can't itemize deductions because you don't have enough to beat std deduction
if the RMD goes direct to the charity (QCD), it never shows up in your income so is never taxed.

if RMD comes to you, it appears in your taxable income and is taxed. If you also then give the RMD to charity,
you are worse off by the amount of the tax.

If you are already itemizing because you have enough deductions, then maybe it is not any different because the RMD
is income but is also a deduction so effectively is not taxed. However since the RMD appears in AGI, some credits/deductions might possibly be reduced making this somewhat less favorable.
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bertilak
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Re: Charitable donation from RMD

Post by bertilak »

kaneohe, thanks!
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pshonore
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Re: Charitable donation from RMD

Post by pshonore »

And don't forget state taxes. If you itemize, then generally there is no difference between the QCD and making it directly (although it may effect any phaseouts based on AGI like Medical expenses, SS Taxability, etc). However unless your State return also allows for charitable deductions, you will pay more if you do not go the QCD route.
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HueyLD
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Re: Charitable donation from RMD

Post by HueyLD »

.............
Last edited by HueyLD on Sun Feb 08, 2015 6:34 pm, edited 1 time in total.
kaneohe
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Re: Charitable donation from RMD

Post by kaneohe »

Would it be fair to say: QCD >= RMD, donate, itemize ?

that is to say the QCD is always at least as good as the RMD, donate process and in some/many? cases is better
or are there exceptions to that?
ResNullius
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Re: Charitable donation from RMD

Post by ResNullius »

BL wrote:
gkaplan wrote:If I understand this correctly, if I made such a charitable donation from my entire RMD, I would not have pay taxes on the RMD. I assume then that I could not take a charity deduction on my Schedule B, is that correct?
Correct, that is if you mean Schedule A.
But does it count towards your AGI, which determines your marginal tax rate. Same for MAGI, which determines your Medicare Part B premium.
Calm Man
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Re: Charitable donation from RMD

Post by Calm Man »

With the new tax rules there is also a phaseout of personal exemptions and deductions as AGI increases. Thinking about this, I cannot think of a single situation where it is better to donate from personal funds after taking the RMD than just using the QCD. Is there one?
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BL
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Re: Charitable donation from RMD

Post by BL »

It doesn't count toward AGI, as it doesn't get recorded on the income column, even though the information is there on the left on line 15a IRA distributions: (15a, dollar amount, b. taxable amount (QCD) 15b: blank.
As for MAGI, I believe that would also be lower.

See: http://fairmark.com/forum/read.php?2,67983
sscritic
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Re: Charitable donation from RMD

Post by sscritic »

BL wrote: As for MAGI, I believe that would also be lower.
There are six different MAGI. If you are responding to the question about IRMAA, the correct MAGI is AGI plus exempt interest. A lower AGI gives you a lower MAGI, no question about it; it's just arithmetic:
X - Y above the line is less than X above the line, so too then is X - Y + Z less than X + Z
Naikansha
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How to think of your Charitable donation from RMD

Post by Naikansha »

This is how I think of a qualified charitable distribution (QCD):
Many taxpayers are able to take adjustments to their gross income (line 36 on last year's 1040). Adjustments lower your gross income. Insofar as the QCD lowers your RMD which is added to your gross income (reported as an IRA distribution on line 15a last year), it has the same EFFECT as an income adjustment, though it is not reported as such. Nor is a QCD the same as an adjustment to income reported on Schedule A as a charitable contribution. So even though our charitable instincts cannot be observed by one and all, we get to pay lower taxes as our reported income is lowered by the QCD.

To have your QCD taken from your scheduled RMD, all you need to do is call the Vanguard retirement section and talk to a retirement specialist. For each contribution, you will receive a check from Vanguard that you can then pass on.
Alan S.
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Re: Charitable donation from RMD

Post by Alan S. »

Note that while the January deadline to DO a QCD for 2012 has ended, your time limit is still open to elect whether a January QCD will be reported for 2012 or 2013 remains open.

For 2013, remember that your first non QCD distribution is deemed to apply to your RMD. That means if you take a non QCD distribution at anytime in 2013, any later QCD cannot offset that taxable income. For planning purposes, this means that if you are even CONSIDERING a QCD for 2013, do NOT take out any distributions until you make your decision on the QCD.
sport
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Re: Charitable donation from RMD

Post by sport »

Alan S. wrote:Note that while the January deadline to DO a QCD for 2012 has ended, your time limit is still open to elect whether a January QCD will be reported for 2012 or 2013 remains open.

For 2013, remember that your first non QCD distribution is deemed to apply to your RMD. That means if you take a non QCD distribution at anytime in 2013, any later QCD cannot offset that taxable income. For planning purposes, this means that if you are even CONSIDERING a QCD for 2013, do NOT take out any distributions until you make your decision on the QCD.
Alan,
If I have a 10k RMD requirement, and I know I want to make a 2k QCD, can I take out an 8k RMD early in the year, and make the 2k QCD later in the year to complete the RMD requiremet?
Jeff
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Re: Charitable donation from RMD

Post by Naikansha »

I'm not Alan, but he is correct that your QCD must come out before your RMD, no matter how you wish to allocate your RMD distributiions from your IRA.
sscritic
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Re: Charitable donation from RMD

Post by sscritic »

Could you please clarify? I don't read Alan that way.

I have a RMD of $10k

I take out $2k in January. It is not a QCD. It applies to my RMD. I still have $8k of RMD left.

I take out $2k in March. It is not a QCD. It applies to my RMD. I still have $6k of RMD left.

I attempt a QCD of $5k in May. Is this not allowed? This $5k is not intended to offset any of the previous $4k of withdrawals, but to offset $5k of the remaining $6k of RMD.
That means if you take a non QCD distribution at anytime in 2013, any later QCD cannot offset that taxable income.
I am not trying to offset that income (the first $4k), but this income (the last $6k).
kaneohe
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Re: Charitable donation from RMD

Post by kaneohe »

Naikansha wrote:I'm not Alan, but he is correct that your QCD must come out before your RMD, no matter how you wish to allocate your RMD distributiions from your IRA.
That's not quite what Alan S. said so I'm interested in whatever else develops. I can understand that if you have a 10K RMD requirement, and if you first take out 10K and then later request a 5K QCD, that you might not get it the 5K QCD because you already used up the RMD with the first 10K.

.....but Jeff asked if the distribution and the QCD total up to the RMD requirement, does the order matter.........

can never beat ssc but I'll leave this so he'll know he'll have keep looking back............
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BL
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Re: Charitable donation from RMD

Post by BL »

Ok, maybe I need some clarification, too. The first dollars taken out of the IRA are considered the RMD funds, and unless they are made out to a charity, they are taxable. But-- since $100,000 can actually be given to charity non-taxable, can your RMD be $100 and the QCD still be any amount up to $100,000? I am planning to give more than my RMD to charity this year from my IRA (QCD, non-taxable) and I think it is not limited by the RMD amount.
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Re: Charitable donation from RMD

Post by Alan S. »

sscritic is correct.

Your RMD and QCD can interract in numerous ways in both amounts and timing. My earlier comment was meant to emphasize that if you want your entire RMD to be non taxable, you cannot take any pre QCD distributions. Congress made an exception for that for Dec, 2012 distributions when they correctly figured that the public had good reason to not wait any longer for them to act for 2012 and therefore took out their RMDs in December. Congress enabled such distributions to be indirectly transferred to a charity by 1/31/2013 and reported as 2012 QCDs.

BL,
Yes, the QCD is not limited to any amount other than 100k. It can be more than your RMD or less than your RMD, and be made prior to other IRA distributions or after. For example, if you need 2k for spending and take that out of your IRA first, that 2k will be taxable and apply against your RMD. Later, you can still do a QCD up to 100k and it would apply to the remainder of your RMD and not be included in your AGI. Only the 2k you took out earlier will be in your AGI on line 15b.
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BL
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Re: Charitable donation from RMD

Post by BL »

Thanks, Alan S. Now I can go forward with my plan without any second thoughts.

This is such a good deal and I think too few people outside of Bogleheads have even heard of it.
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Re: Charitable donation from RMD update from VG

Post by Naikansha »

I have just spoken with VG this afternoon about making qualified charitable distributions from a RMD amount to be taken for 2013. As I mentioned earlier and can now confirm, they want to receive the information about recipients and amounts before doing the RMD distribution(s), whenever you wish that to occur. There are now forms available if you prefer to use them, or you can give them the information by phone. There is no minimal amount but if you wish $5k or more go to a recipient, special security is required: if requested by forms, a signature guarantee is needed but if by phone, special security questions are asked of the donor. if you are taking your first RMD, you should submit all this information after the time of your 70-1/2 birthdate since they can't process the information until then.
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Re: Charitable donation from RMD

Post by cheese_breath »

Naikansha wrote:I'm not Alan, but he is correct that your QCD must come out before your RMD, no matter how you wish to allocate your RMD distributiions from your IRA.
Help me understand this better. Let’s say I have IRAs with Vanguard and TIAA-CREF. My total RMD for the year is $20,000, $10,000 from Vanguard and $10,000 from TIAA-CREF (made up numbers). Now let’s say I’ve already taken my $10,000 Vanguard RMD. (Vanguard doesn’t know this, but I intend to take the whole $20,000 out of Vanguard and nothing out of TIAA-CREF by the end of the year.) So now I decide I want to take a $4,000 QCD from Vanguard and withdraw another $6,000 later this year to satisfy my total RMD requirement. Do I have a problem?
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Re: Charitable donation from RMD

Post by cheese_breath »

BL wrote:I understand that setting up recurring withdrawals requires a written form and signature guarantee.
I talked to a retirement specialist this morning, and he said we couldn't set up recurring withdrawals for QCDs, only normal withdrawals. Ah well, who to believe?
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Re: Charitable donation from RMD

Post by kaneohe »

cheese_breath wrote:
Naikansha wrote:I'm not Alan, but he is correct that your QCD must come out before your RMD, no matter how you wish to allocate your RMD distributiions from your IRA.
Help me understand this better. Let’s say I have IRAs with Vanguard and TIAA-CREF. My total RMD for the year is $20,000, $10,000 from Vanguard and $10,000 from TIAA-CREF (made up numbers). Now let’s say I’ve already taken my $10,000 Vanguard RMD. (Vanguard doesn’t know this, but I intend to take the whole $20,000 out of Vanguard and nothing out of TIAA-CREF by the end of the year.) So now I decide I want to take a $4,000 QCD from Vanguard and withdraw another $6,000 later this year to satisfy my total RMD requirement. Do I have a problem?
I don't think you have a problem. Go back and re-read this thread after the quote you referenced (which several posters disagreed with).
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Re: Charitable donation from RMD

Post by Naikansha »

You don't have a problem with regard to your timing the RMD withdrawal after the QCD if that is what you wish. However, VG must have your QCD information before you make any RMD's since this will be deducted from the total. They will then make the QCD withdrawals before or at the same time as your RMD and that will be sent you as checks to your charities which you then forward on.
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Re: Charitable donation from RMD

Post by cheese_breath »

kaneohe wrote:
cheese_breath wrote:
Naikansha wrote:I'm not Alan, but he is correct that your QCD must come out before your RMD, no matter how you wish to allocate your RMD distributiions from your IRA.
Help me understand this better. Let’s say I have IRAs with Vanguard and TIAA-CREF. My total RMD for the year is $20,000, $10,000 from Vanguard and $10,000 from TIAA-CREF (made up numbers). Now let’s say I’ve already taken my $10,000 Vanguard RMD. (Vanguard doesn’t know this, but I intend to take the whole $20,000 out of Vanguard and nothing out of TIAA-CREF by the end of the year.) So now I decide I want to take a $4,000 QCD from Vanguard and withdraw another $6,000 later this year to satisfy my total RMD requirement. Do I have a problem?
I don't think you have a problem. Go back and re-read this thread after the quote you referenced (which several posters disagreed with).
I think maybe I’m OK too, but let me run this by you to see if it makes sense. Going back to my example, all the IRS cares about is that I took $20,000 out of my IRAs to satisfy my RMD. It doesn’t care which IRAs. From Vanguard’s perspective it thinks I took my RMD plus another $10,000. $4,000 of this was for a QCD, the other $6,000 was for me. So when I get my 2013 1099R it should show gross income of $20,000 and taxable income of $16,000 (because of the QCD). Yes (I hope)?
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Alan S.
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Re: Charitable donation from RMD

Post by Alan S. »

cheese_breath wrote:
Naikansha wrote:I'm not Alan, but he is correct that your QCD must come out before your RMD, no matter how you wish to allocate your RMD distributiions from your IRA.
Help me understand this better. Let’s say I have IRAs with Vanguard and TIAA-CREF. My total RMD for the year is $20,000, $10,000 from Vanguard and $10,000 from TIAA-CREF (made up numbers). Now let’s say I’ve already taken my $10,000 Vanguard RMD. (Vanguard doesn’t know this, but I intend to take the whole $20,000 out of Vanguard and nothing out of TIAA-CREF by the end of the year.) So now I decide I want to take a $4,000 QCD from Vanguard and withdraw another $6,000 later this year to satisfy my total RMD requirement. Do I have a problem?
You don't have a problem unless you wanted that first 10k of your RMD characterized as a QCD. As of right now, your 10k will be taxable and you have 10k remaining for your RMD. As long as you did not plan for your QCD to be larger than 10k, you are fine. You can still do the 4k QCD and for the last 6k you an either do another QCD for 6k or just distribute the 6k to yourself. If you do as planned, you will end up reporting the gross distribution of 20k on line 15a, 16k on 15b and "QCD" entered next to 15b. 16k is the amount that will be part of your AGI.

A QCD can either be less than, the same as, or more than the RMD, but if it is done after any other IRA distribution from any IRA account you own, the portion taken first cannot be part of the QCD.

The 2013 1099R Inst have been released and there is NO special reporting requirement for a QCD. Vanguard will report them like any other IRA distribution on the 1099R. Therefore, there is some internal reason Vanguard has developed a special form. There might have been some abuses of the QCD rules by IRA owners that ended up involving Vanguard and perhaps the forms provides better written documentation exactly who the charitable donee is. Just speculating here - someone may wish to ask Vanguard about the reasons for the form.
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Re: Charitable donation from RMD

Post by cheese_breath »

Well I did my first QCD, got the check from Vanguard yesterday, and noticed something interesting. The check confirmation statement has the fund number the money was withdrawn from. OK, I can live with that, but the check has my account number on it in the upper left hand side, right after the check number and date of check. Has anyone else noticed that? Hopefully the people at my (Church) charity are honest, but if they're not they would seem to have the information they need to get into my IRA. Does it concern you?
The surest way to know the future is when it becomes the past.
sport
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Re: Charitable donation from RMD

Post by sport »

cheese_breath wrote:Well I did my first QCD, got the check from Vanguard yesterday, and noticed something interesting. The check confirmation statement has the fund number the money was withdrawn from. OK, I can live with that, but the check has my account number on it in the upper left hand side, right after the check number and date of check. Has anyone else noticed that? Hopefully the people at my (Church) charity are honest, but if they're not they would seem to have the information they need to get into my IRA. Does it concern you?
AFAIK, the only places that Vanguard will send your money are to your mailing address or to a bank account you have linked to. If anyone, even you, try to change the address or bank account, or add new ones, Vanguard will send a snail mail notice to your address. Vanguard also will put a 10-day hold on any transfers to a new location. So, if someone at your church decided to try to take your money, you would be notified before they could take anything. They also might go to jail for attempted theft, fraud, etc. So, basically, the risk seems to be small. However, I agree with you. There is no need for Vanguard to put fund and account number information on such a check. I would complain about it too.
Jeff
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cheese_breath
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Re: Charitable donation from RMD

Post by cheese_breath »

jsl11 wrote:
cheese_breath wrote:Well I did my first QCD, got the check from Vanguard yesterday, and noticed something interesting. The check confirmation statement has the fund number the money was withdrawn from. OK, I can live with that, but the check has my account number on it in the upper left hand side, right after the check number and date of check. Has anyone else noticed that? Hopefully the people at my (Church) charity are honest, but if they're not they would seem to have the information they need to get into my IRA. Does it concern you?
AFAIK, the only places that Vanguard will send your money are to your mailing address or to a bank account you have linked to. If anyone, even you, try to change the address or bank account, or add new ones, Vanguard will send a snail mail notice to your address. Vanguard also will put a 10-day hold on any transfers to a new location. So, if someone at your church decided to try to take your money, you would be notified before they could take anything. They also might go to jail for attempted theft, fraud, etc. So, basically, the risk seems to be small. However, I agree with you. There is no need for Vanguard to put fund and account number information on such a check. I would complain about it too.
Jeff
Good to know. Makes me feel a lot better. And I did complain, sent an Email to Vanguard right after I posted my message te Boggleheads.
The surest way to know the future is when it becomes the past.
motodoc42
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Re: Charitable donation from RMD

Post by motodoc42 »

cheese_breath wrote:Well I did my first QCD, got the check from Vanguard yesterday, and noticed something interesting. The check confirmation statement has the fund number the money was withdrawn from. OK, I can live with that, but the check has my account number on it in the upper left hand side, right after the check number and date of check. Has anyone else noticed that? Hopefully the people at my (Church) charity are honest, but if they're not they would seem to have the information they need to get into my IRA. Does it concern you?
Keep in mind, that when you write a personal check, your bank account # is on the check.
Motodoc42
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cheese_breath
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Re: Charitable donation from RMD

Post by cheese_breath »

motodoc42 wrote:
cheese_breath wrote:Well I did my first QCD, got the check from Vanguard yesterday, and noticed something interesting. The check confirmation statement has the fund number the money was withdrawn from. OK, I can live with that, but the check has my account number on it in the upper left hand side, right after the check number and date of check. Has anyone else noticed that? Hopefully the people at my (Church) charity are honest, but if they're not they would seem to have the information they need to get into my IRA. Does it concern you?
Keep in mind, that when you write a personal check, your bank account # is on the check.
Motodoc42
That's true, but I only have a couple thousand in my checking account. I have a lot more in my IRA.
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cheese_breath
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Re: Charitable donation from RMD

Post by cheese_breath »

I got my reply back from Vanguard today, and here’s what they said.
Thank you for taking the time to contact us.

Vanguard takes the security of your account very seriously, and we apply
strict security measures before releasing information about a specific
account or processing a purchase, exchange, or sale of shares.

Below, we've described some of our security procedures for each method of
transaction request--online, by phone, or by mail. Regardless of the method
used, we provide a confirmation to account owners once a transaction has
been processed.

Online requests >>
The secure area of our website uses the industry-standard Secure Sockets
Layer (SSL) 128-bit encryption for clients who are logged in.

* To be granted online access to an account, the owner must register and
establish a user name and password. To complete the registration process,
he or she must enter information specific to the account. The owner also
sets up security questions to be used--if necessary--to verify identity at
logon and in connection with certain sensitive transactions.
* Our website uses cookies to recognize the registered user's computer. If
the user or someone else attempts to log on with the account owner's user
name and password from a computer not previously used to log on to
vanguard.com, the website will require an additional security check to
verify identity.
* If a request is made online to change the address listed for an account,
we'll limit the ability to request a redemption check online or by phone
for a specified period of time after the address change is made. This
allows time for mailed confirmations of the change to reach both the old
and new addresses so that the account owner can notify us if the change
isn't authorized or the information is incorrect.
* Redemption checks are made payable to the account owner (or owners) only.

Please note:

* Vanguard doesn't maintain a record of website passwords. This means that
anyone who forgets his or her password must correctly answer a security
question to gain online access. If the answer is incorrect, the account
owner must contact Vanguard--and undergo additional security checks--to
regain access.
* The account owner has the option to restrict account access from
unrecognized computers (and therefore have access only from a recognized
computer). You should consider electing this option if you always log on
from recognized computers, have concerns about identity theft, or believe
someone may have access to your logon information. You can activate this
feature online by following these steps:

1. Log on to your account at vanguard.com.
2. From the "My Accounts" dropdown, select "Account maintenance."
3. Under "Security profile," choose "Computer access restrictions."
4. Select "Restrict unrecognized computers from accessing my accounts" and
then "Submit."

You can disable this feature at any time--from the same area of our
website--by answering two of your three web security questions and then
selecting "Allow me to access my accounts from unrecognized or new
computers."

Telephone requests >>
To discuss an account, a caller must provide certain information to
identify himself or herself as the owner, or as someone with documented
authority to act on the account. After successful verification, we'll allow
the caller to obtain information about that account or conduct
transactions.

Account owners also have the option of setting up a verbal password, which
can be established by calling us at the phone number below. Once it's in
place, we'll require the password before discussing the account.

* Assets can be moved between accounts only if the caller is either a
registered owner of both accounts or an individual with documented
authority to act on both.
* Redemption checks will be sent only to the address we have on file for
the account, unless the caller satisfies strict additional security
measures. (If a caller requests that the address listed for the account be
changed, we'll process the change, but we'll limit the ability to request a
redemption check online or by phone for a specified period of time after
the address change is made. This allows time for mailed confirmations of
the change to reach both the old and new addresses so that the account
owner can notify us if the information is incorrect.)
* Redemption checks will be made payable only to the registered owner (or
owners) of the account, unless the caller satisfies strict additional
security measures.

Written requests >>
We'll comply with written requests only if they come from either the
account owner or someone with documented authority to act on the account.

* For written requests involving the transfer or sale of assets, we require
the signatures of all registered account owners.
* For written requests to send redemption checks anywhere other than the
account's listed address, we require signature guarantees for all of the
account owners. The purpose of a signature guarantee is to authenticate a
signature, and it can be obtained from many different types of financial
institutions, including commercial banks, savings banks, credit unions,
trust companies, or member firms of a U.S. stock exchange.

Although we have strong security measures in place for online, phone, and
written transaction requests, we want you to take steps to protect yourself
as well. Please give a careful review to any account-related mailings you
receive from Vanguard. If you see any transactions that appear to be
erroneous, you should contact us immediately so that we can investigate the
situation.
That goes a long way towards easing my mind and increasing my comfort level,, but I still don't understand why they feel the need to put the account number on the check. I sent them another question asking this.
The surest way to know the future is when it becomes the past.
User avatar
cheese_breath
Posts: 11786
Joined: Wed Sep 14, 2011 7:08 pm

Re: Charitable donation from RMD

Post by cheese_breath »

Here’s Vanguard’s response to my follow-up question about why then need my account number on the check.
The funds are removed from your account on the trade date of the
distribution. With the trade date of February 19, 2013, the transaction ran
through our nightly cycle and the check would have gone out the next
morning. The account number on the check is not identified specifically as
your Vanguard account number. Some clients have numerous accounts and
transactions and this assists Vanguard in identifying the check for the
appropriate account, in the event the funds need to be verified or if the
check is lost or stolen.
It all seems reasonable except the sentence. “The account number on the check is not identified specifically as your Vanguard account number.” While it’s true the check doesn’t contain the words “account number” it does say “Vanguard”, and most fools should be able to guess that strange number on it is probably an account number. But I admit their reason for having it there seems ‘reasonable’.
The surest way to know the future is when it becomes the past.
sport
Posts: 12094
Joined: Tue Feb 27, 2007 2:26 pm
Location: Cleveland, OH

Re: Charitable donation from RMD

Post by sport »

It would seem they could accomplish most of that by using a check stub with the account number and the check without the number. You would tear off the stub and keep it while sending the check to the charity.
Jeff
Alan S.
Posts: 12669
Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: Charitable donation from RMD

Post by Alan S. »

By their stance, at least Vanguard is confident enough in their security procedures that they are willing to "expose" the account number to others for the benefit of tracking lost checks. For this tracking benefit to make any sense, they must have confidence that this benefit exceeds any security exposure it creates.

I suspect that most IRA custodians show an account number or truncated number on their distribution checks, but perhaps someone can verify that.
User avatar
cheese_breath
Posts: 11786
Joined: Wed Sep 14, 2011 7:08 pm

Re: Charitable donation from RMD

Post by cheese_breath »

jsl11 wrote:It would seem they could accomplish most of that by using a check stub with the account number and the check without the number. You would tear off the stub and keep it while sending the check to the charity.
Jeff
That would seem reasonable. However, the check stub (check confirmation) is also made out to the charity, and it contains the sentence "This check is made payable to you at the request of the shareholder." So I'm supposed to give the stub to the charity too. I did make a copy for my records though.
The surest way to know the future is when it becomes the past.
sport
Posts: 12094
Joined: Tue Feb 27, 2007 2:26 pm
Location: Cleveland, OH

Re: Charitable donation from RMD

Post by sport »

cheese_breath wrote:
jsl11 wrote:It would seem they could accomplish most of that by using a check stub with the account number and the check without the number. You would tear off the stub and keep it while sending the check to the charity.
Jeff
That would seem reasonable. However, the check stub (check confirmation) is also made out to the charity, and it contains the sentence "This check is made payable to you at the request of the shareholder." So I'm supposed to give the stub to the charity too. I did make a copy for my records though.
Then they can have two check stubs. One for you with the number, and one for the payee without.

Jeff
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