RMD Withdrawal Plans

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ralph124cf
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RMD Withdrawal Plans

Post by ralph124cf » Tue Jan 16, 2018 11:55 am

I have just set up an automatic RMD withdrawal plan with Fidelity for a rollover IRA. I had a choice of monthly, quarterly or yearly payments, and the money will be credited to my bank account.

I am trying to do the same thing with Schwab, but I don't see any way to do so. Schwab has an RMD calculator that I can use, and I could plug that number into the auto withdrawal tool, but I am trying to have Schwab do this automatically each year so that changing the amount each year does not slip my mind.

Anybody with a Schwab IRA that has done this?

Thanks,

Ralph


Nowizard
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Re: RMD Withdrawal Plans

Post by Nowizard » Tue Jan 16, 2018 12:26 pm

Do you actually want an automatic withdrawal plan? There are some valid reasons for taking it at times that depend on your own circumstances that can supercede the convenience of automatic withdrawals for some people.

Tim

Alan S.
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Re: RMD Withdrawal Plans

Post by Alan S. » Tue Jan 16, 2018 1:28 pm

You also need to determine if you want federal (or state) withholding on the RMD distributions, or if you are paying taxes through quarterly estimates or withholding from another source.

And if you are planning QCDs, you will probably have to complete them all before setting up automatic distributions for the remainder of your RMD. Trying to integrate QCDs into an automatic RMD schedule is inadvisable due to the QCD timing requirements.

Finally, if you DO set up an automatic schedule you still have to monitor it and in December check to see if your total RMD is completed. Make sure the distribution date each month is after the 5th and before the 20th or you could end up with a late December snafu with no time to make a last minute adjustment. Note that IF there is a foul up, the IRS will almost certainly waive any penalty with a properly filed Form 5329 using the foul up of automatic payments as a "reasonable cause".

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Doom&Gloom
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Re: RMD Withdrawal Plans

Post by Doom&Gloom » Tue Jan 16, 2018 1:47 pm

I just went through this headache with Schwab. Unlike Vanguard, Schwab would not allow me to do anything at all prior to the calendar year that I qualify for RMDs. But at that point Schwab did calculate my RMD without my requesting them to do so. I eventually found an option on their site to request them to send me a check.

However, they would not make an EFT to my checking account unless I submitted a request via snail-mail to authorize setting up MoneyLink (I think that was their nomenclature). The form was entitled: Request a Required Minimum Distribution From Your Schwab IRA. That form allows you to specify the frequency of distributions. I think it will do that regardless of how you make your RMD.

My distributions appear to be scheduled now, but it seems to me that this could have been set up online as Vanguard and Fidelity allow. And it certainly could have been easier to navigate on Schwab's website.

SittingOnTheFence
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Re: RMD Withdrawal Plans

Post by SittingOnTheFence » Wed Jan 17, 2018 12:27 am

It's my understanding that as long as the accounts are of the same type (ie: both are TIRA's, or whatever) you can withdraw all of the RMD from one account, it's not required to withdraw from each one separately. This is how I plan to do it starting this year. I have 3 TIRA's in 3 different institutions. I'll calculate the RMD for each TIRA and combine them into withdrawal from one TIRA. I also have an inherited IRA. It is not permitted to throw that into the pot with the others, that RMD must come from that account. I see this approach as simplifying the entire process.

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celia
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Re: RMD Withdrawal Plans

Post by celia » Wed Jan 17, 2018 3:54 am

SittingOnTheFence wrote:
Wed Jan 17, 2018 12:27 am
It's my understanding that as long as the accounts are of the same type (ie: both are TIRA's, or whatever) you can withdraw all of the RMD from one account, it's not required to withdraw from each one separately. This is how I plan to do it starting this year. I have 3 TIRA's in 3 different institutions. I'll calculate the RMD for each TIRA and combine them into withdrawal from one TIRA. I also have an inherited IRA. It is not permitted to throw that into the pot with the others, that RMD must come from that account. I see this approach as simplifying the entire process.
That should work, but then you would be responsible for finding out what the RMDs are each year, adding them together, and updating your automatic withdrawal amount. You will need to do this in early January each year.

I believe the OP is trying to set it up so the changed withdrawal amounts each year will be automatically calculated by each custodian, in case he should forget to update it.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.

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