What is best strategy for taking RMD from VG IRA

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RetiredInTN2017
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What is best strategy for taking RMD from VG IRA

Post by RetiredInTN2017 » Thu Apr 19, 2018 9:39 am

I am 69 and trying to analyze the best strategy for removing my required RMD amount from my Vanguard IRA when I reach 70 next year. My VG IRA account is made up of the following 10 accounts.
VEXAX 3%
VIGAX 1%
VBILX 1%
VBIRX 1%
VBTLX 28%
VTABX 4%
VTIAX 17%
VTSAX 32%
VWIAX 6%
VWENX 6%
Presently this is 51% stocks and 49% bonds. My first idea was to have 4% taken from each fund annually, paid in monthly installments and taxed at 22%. Presently my wife and live comfortably on my pensions and small rent income which amounts to $65K annually. Maybe there is a better way to take from the funds or distribute and I am open to suggestions.

Gill
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Re: What is best strategy for taking RMD from VG IRA

Post by Gill » Thu Apr 19, 2018 9:50 am

Why don't you consolidate your IRA into fewer funds? To take monthly distributions from ten funds would be 120 transactions each year. You have funds that represent 1% of the total and all but three of your funds represent less than ten percent. For a starter you could eliminate those and be left with three funds. How big is the IRA? That might help determine how you should take distributions once you consolidate the account into fewer or perhaps only one fund.
Gill

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jjustice
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Re: What is best strategy for taking RMD from VG IRA

Post by jjustice » Thu Apr 19, 2018 10:01 am

I have a suggestion: qualified charitable distributions. Following up on the previous poster's suggestion of consolidation, you could put it all into two funds: a LifeStrategy fund and the Prime money market fund. Then you can write checks on the money market fund (minimum $250) directly to qualified charities. This will reduce your AGI and is the only tax-advantaged way of giving to charity that is left for most of us who do not have large itemized deductions.

The consolidation would not be necessary, but the addition of the money market fund is necessary for the QCD strategy.

John

Gill
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Re: What is best strategy for taking RMD from VG IRA

Post by Gill » Thu Apr 19, 2018 10:06 am

jjustice wrote:
Thu Apr 19, 2018 10:01 am
I have a suggestion: qualified charitable distributions. Following up on the previous poster's suggestion of consolidation, you could put it all into two funds: a LifeStrategy fund and the Prime money market fund. Then you can write checks on the money market fund (minimum $250) directly to qualified charities. This will reduce your AGI and is the only tax-advantaged way of giving to charity that is left for most of us who do not have large itemized deductions.

The consolidation would not be necessary, but the addition of the money market fund is necessary for the QCD strategy.

John
You can't draw checks yourself on the IRA. Also, why do you need the money market fund? Vanguard will issue the checks payable to the charities.
Gill

Lynette
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Re: What is best strategy for taking RMD from VG IRA

Post by Lynette » Thu Apr 19, 2018 10:09 am

I'm about to request Vanguard to send me a few QCD checks for RMDs. I need to do the same at Vanguard. Earlier in the year I moved the amount of money I needed for RMDs to a Money Market account. I know that some people keep on making QCDs to later in the year and then take their RMD. Tracking QCDs is a bit of a pain for the IRS so I'm simply going to get it over with at once - get the QCDs done with and then take out the remaining RMDs and pay tax.

QCDs are very important for me as I did not plan my tax life after retirement efficiently - largely as I worked into my seventies. In any event for me RMDs are a pain as they increase my MAGI which increases the amount I have to pay to medicare for IRMAA's. QCDs reduce one's MAGI.

sport
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Re: What is best strategy for taking RMD from VG IRA

Post by sport » Thu Apr 19, 2018 10:48 am

Gill wrote:
Thu Apr 19, 2018 10:06 am
You can't draw checks yourself on the IRA. Also, why do you need the money market fund? Vanguard will issue the checks payable to the charities.
Gill
Yes you can draw check yourself. I have recently asked for such checks and Vanguard sent them to me. The reason for the checks is that I know they are cashed when the money is withdrawn from my account. If I have Vanguard issue the check, the money is withdrawn immediately and I cannot tell if the check was lost in the mail, or not cashed for some other reason. The only difficulty with writing your own checks is that there is a $250 minimum.

sport
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Re: What is best strategy for taking RMD from VG IRA

Post by sport » Thu Apr 19, 2018 10:52 am

Lynette wrote:
Thu Apr 19, 2018 10:09 am
I'm about to request Vanguard to send me a few QCD checks for RMDs. I need to do the same at Vanguard. Earlier in the year I moved the amount of money I needed for RMDs to a Money Market account. I know that some people keep on making QCDs to later in the year and then take their RMD. Tracking QCDs is a bit of a pain for the IRS so I'm simply going to get it over with at once - get the QCDs done with and then take out the remaining RMDs and pay tax.

QCDs are very important for me as I did not plan my tax life after retirement efficiently - largely as I worked into my seventies. In any event for me RMDs are a pain as they increase my MAGI which increases the amount I have to pay to medicare for IRMAA's. QCDs reduce one's MAGI.
The IRS does not track your QCDs. QCDs are shown as ordinary withdrawals at Vanguard and also on your 1099R. The only place the IRS sees them is when you submit your tax return. The instructions say to write "QCD" on the line to explain the difference between the withdrawn amount and the taxable amount.

Lynette
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Re: What is best strategy for taking RMD from VG IRA

Post by Lynette » Thu Apr 19, 2018 12:03 pm

sport wrote:
Thu Apr 19, 2018 10:52 am
Lynette wrote:
Thu Apr 19, 2018 10:09 am
I'm about to request Vanguard to send me a few QCD checks for RMDs. I need to do the same at Vanguard. Earlier in the year I moved the amount of money I needed for RMDs to a Money Market account. I know that some people keep on making QCDs to later in the year and then take their RMD. Tracking QCDs is a bit of a pain for the IRS so I'm simply going to get it over with at once - get the QCDs done with and then take out the remaining RMDs and pay tax.

QCDs are very important for me as I did not plan my tax life after retirement efficiently - largely as I worked into my seventies. In any event for me RMDs are a pain as they increase my MAGI which increases the amount I have to pay to medicare for IRMAA's. QCDs reduce one's MAGI.
The IRS does not track your QCDs. QCDs are shown as ordinary withdrawals at Vanguard and also on your 1099R. The only place the IRS sees them is when you submit your tax return. The instructions say to write "QCD" on the line to explain the difference between the withdrawn amount and the taxable amount.
Yes, but this means that I have to keep track of them. So if I make 30 small QCDs, I have to keep track of all of them. It is much easier if I only have 4 of them that I have to aggregate and on on my 1040.

GAAP
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Re: What is best strategy for taking RMD from VG IRA

Post by GAAP » Thu Apr 19, 2018 12:10 pm

I'm assuming you have a desired allocation between the funds. In that case, use the RMDs to rebalance closer to that allocation.

Alan S.
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Re: What is best strategy for taking RMD from VG IRA

Post by Alan S. » Thu Apr 19, 2018 12:24 pm

sport wrote:
Thu Apr 19, 2018 10:48 am
Gill wrote:
Thu Apr 19, 2018 10:06 am
You can't draw checks yourself on the IRA. Also, why do you need the money market fund? Vanguard will issue the checks payable to the charities.
Gill
Yes you can draw check yourself. I have recently asked for such checks and Vanguard sent them to me. The reason for the checks is that I know they are cashed when the money is withdrawn from my account. If I have Vanguard issue the check, the money is withdrawn immediately and I cannot tell if the check was lost in the mail, or not cashed for some other reason. The only difficulty with writing your own checks is that there is a $250 minimum.
Seems like another possible exposure is an inefficient charity could cause you to fall short of your RMD. Do you do anything to address this exposure, such as putting a note with check to cash within 10 days for example? Or issue all your QCD before November?

sport
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Re: What is best strategy for taking RMD from VG IRA

Post by sport » Thu Apr 19, 2018 12:51 pm

Alan S. wrote:
Thu Apr 19, 2018 12:24 pm
sport wrote:
Thu Apr 19, 2018 10:48 am
Gill wrote:
Thu Apr 19, 2018 10:06 am
You can't draw checks yourself on the IRA. Also, why do you need the money market fund? Vanguard will issue the checks payable to the charities.
Gill
Yes you can draw check yourself. I have recently asked for such checks and Vanguard sent them to me. The reason for the checks is that I know they are cashed when the money is withdrawn from my account. If I have Vanguard issue the check, the money is withdrawn immediately and I cannot tell if the check was lost in the mail, or not cashed for some other reason. The only difficulty with writing your own checks is that there is a $250 minimum.
Seems like another possible exposure is an inefficient charity could cause you to fall short of your RMD. Do you do anything to address this exposure, such as putting a note with check to cash within 10 days for example? Or issue all your QCD before November?
Alan,
That is certainly correct. If the charity does not cash the check before the end of the year, the QCD would be for the following year. I try to make all my QCDs written this way no later than September. Vanguard also keeps track of my RMD status. So, if the check did not get cashed, I would be aware of it and could take an additional withdrawal to make sure I make my full RMD as required.

sport
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Re: What is best strategy for taking RMD from VG IRA

Post by sport » Thu Apr 19, 2018 12:55 pm

Lynette wrote:
Thu Apr 19, 2018 12:03 pm
sport wrote:
Thu Apr 19, 2018 10:52 am
Lynette wrote:
Thu Apr 19, 2018 10:09 am
I'm about to request Vanguard to send me a few QCD checks for RMDs. I need to do the same at Vanguard. Earlier in the year I moved the amount of money I needed for RMDs to a Money Market account. I know that some people keep on making QCDs to later in the year and then take their RMD. Tracking QCDs is a bit of a pain for the IRS so I'm simply going to get it over with at once - get the QCDs done with and then take out the remaining RMDs and pay tax.

QCDs are very important for me as I did not plan my tax life after retirement efficiently - largely as I worked into my seventies. In any event for me RMDs are a pain as they increase my MAGI which increases the amount I have to pay to medicare for IRMAA's. QCDs reduce one's MAGI.
The IRS does not track your QCDs. QCDs are shown as ordinary withdrawals at Vanguard and also on your 1099R. The only place the IRS sees them is when you submit your tax return. The instructions say to write "QCD" on the line to explain the difference between the withdrawn amount and the taxable amount.
Yes, but this means that I have to keep track of them. So if I make 30 small QCDs, I have to keep track of all of them. It is much easier if I only have 4 of them that I have to aggregate and on on my 1040.
Lynette,
I find it helpful to keep a spreadsheet of all charity donations. The spreadsheet computes the total. It also gives me a record of what I gave, so when I want to give something in the following years, I have an easy record to see what I gave last year and I can decide if I want to give the same amount, or increase (or decrease) the donation for the current year.

Lynette
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Re: What is best strategy for taking RMD from VG IRA

Post by Lynette » Thu Apr 19, 2018 1:09 pm

sport wrote:
Thu Apr 19, 2018 12:55 pm
Lynette wrote:
Thu Apr 19, 2018 12:03 pm
sport wrote:
Thu Apr 19, 2018 10:52 am
Lynette wrote:
Thu Apr 19, 2018 10:09 am
I'm about to request Vanguard to send me a few QCD checks for RMDs. I need to do the same at Vanguard. Earlier in the year I moved the amount of money I needed for RMDs to a Money Market account. I know that some people keep on making QCDs to later in the year and then take their RMD. Tracking QCDs is a bit of a pain for the IRS so I'm simply going to get it over with at once - get the QCDs done with and then take out the remaining RMDs and pay tax.

QCDs are very important for me as I did not plan my tax life after retirement efficiently - largely as I worked into my seventies. In any event for me RMDs are a pain as they increase my MAGI which increases the amount I have to pay to medicare for IRMAA's. QCDs reduce one's MAGI.
The IRS does not track your QCDs. QCDs are shown as ordinary withdrawals at Vanguard and also on your
1099R. The only place the IRS sees them is when you submit your tax return. The instructions say to write "QCD" on the line to explain the difference between the withdrawn amount and the taxable amount.
Yes, but this means that I have to keep track of them. So if I make 30 small QCDs, I have to keep track of all of them. It is much easier if I only have 4 of them that I have to aggregate and on on my 1040.
Lynette,
I find it helpful to keep a spreadsheet of all charity donations. The spreadsheet computes the total. It also gives me a record of what I gave, so when I want to give something in the following years, I have an easy record to see what I gave last year and I can decide if I want to give the same amount, or increase (or decrease) the donation for the current year.
sport wrote:
Thu Apr 19, 2018 12:55 pm
Lynette wrote:
Thu Apr 19, 2018 12:03 pm
sport wrote:
Thu Apr 19, 2018 10:52 am
Lynette wrote:
Thu Apr 19, 2018 10:09 am
I'm about to request Vanguard to send me a few QCD checks for RMDs. I need to do the same at Vanguard. Earlier in the year I moved the amount of money I needed for RMDs to a Money Market account. I know that some people keep on making QCDs to later in the year and then take their RMD. Tracking QCDs is a bit of a pain for the IRS so I'm simply going to get it over with at once - get the QCDs done with and then take out the remaining RMDs and pay tax.

QCDs are very important for me as I did not plan my tax life after retirement efficiently - largely as I worked into my seventies. In any event for me RMDs are a pain as they increase my MAGI which increases the amount I have to pay to medicare for IRMAA's. QCDs reduce one's MAGI.
The IRS does not track your QCDs. QCDs are shown as ordinary withdrawals at Vanguard and also on your 1099R. The only place the IRS sees them is when you submit your tax return. The instructions say to write "QCD" on the line to explain the difference between the withdrawn amount and the taxable amount.
Yes, but this means that I have to keep track of them. So if I make 30 small QCDs, I have to keep track of all of them. It is much easier if I only have 4 of them that I have to aggregate and on on my 1040.
Lynette,
I find it helpful to keep a spreadsheet of all charity donations. The spreadsheet computes the total. It also gives me a record of what I gave, so when I want to give something in the following years, I have an easy record to see what I gave last year and I can decide if I want to give the same amount, or increase (or decrease) the donation for the current year.
Thanks - I'm going to update my spreadsheet today and will request Vanguard and Fidelity to send me the checks to mail to the charities.

I know that Vanguard does keep track of the RMD that I owe and I think even what was a QCD though the 1099 will only reflect the total withdrawal. I wonder if anyone has ever been audited and required to prove that the amount one posts as QCD on the 1099 were actually QCDs. This is the first year I am using QCDs and I need to assure that my accounting is accurate.

I think that if I am going to give Charity X - $5000, it is easier to do it in one lump sum rather than five amounts of $1,000 each.

RudyS
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Re: What is best strategy for taking RMD from VG IRA

Post by RudyS » Thu Apr 19, 2018 1:11 pm

The checks drawn on your Vanguard IRA may or may not be valid for a QCD. The mechanism is OK, but the payee needs to be a qualified charity. You could write the checks to anyone. The use of Vanguard checks has been debated here earlier; Fidelity clearly says it is permissible. The point being that the money never gets into the hands of the IRA holder. That check is simply an instruction to Vanguard where to send money.

CurlyDave
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Re: What is best strategy for taking RMD from VG IRA

Post by CurlyDave » Thu Apr 19, 2018 1:21 pm

RetiredInTN2017 wrote:
Thu Apr 19, 2018 9:39 am
... My VG IRA account is made up of the following 10 accounts...
Are you really saying that you have 10 VG accounts or that you have one account with 10 positions in it?

Even if it is 10 separate accounts, the RMD can come from only 1 or 2 and still satisfy the IRS so long as the total amount is high enough.

I would start cutting down on the number of positions by just selling out the smaller ones...

sport
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Re: What is best strategy for taking RMD from VG IRA

Post by sport » Thu Apr 19, 2018 2:28 pm

Lynette wrote:
Thu Apr 19, 2018 1:09 pm
I know that Vanguard does keep track of the RMD that I owe and I think even what was a QCD though the 1099 will only reflect the total withdrawal. I wonder if anyone has ever been audited and required to prove that the amount one posts as QCD on the 1099 were actually QCDs. This is the first year I am using QCDs and I need to assure that my accounting is accurate.
Vanguard does not keep track of QCDs because they cannot verify that the checks went to qualified charities. That is between you, the charity and the IRS. As far as Vanguard is concerned, the QCDs are just another cash withdrawal. In fact, Vanguard encloses a flier with the QCD checks that says you can get your money faster if you let them send it to your bank electronically. Of course, that would not even apply to a QCD, but Vanguard does not differentiate the withdrawals.

To help with a possible audit, I also keep a photocopy of all the QCD checks. I am afraid that one of the charities may neglect to send the required letter of receipt, so at least I would have something to show an auditor.

Gill
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Re: What is best strategy for taking RMD from VG IRA

Post by Gill » Thu Apr 19, 2018 2:32 pm

sport wrote:
Thu Apr 19, 2018 10:48 am
Gill wrote:
Thu Apr 19, 2018 10:06 am
You can't draw checks yourself on the IRA. Also, why do you need the money market fund? Vanguard will issue the checks payable to the charities.
Gill
Yes you can draw check yourself. I have recently asked for such checks and Vanguard sent them to me. The reason for the checks is that I know they are cashed when the money is withdrawn from my account. If I have Vanguard issue the check, the money is withdrawn immediately and I cannot tell if the check was lost in the mail, or not cashed for some other reason. The only difficulty with writing your own checks is that there is a $250 minimum.
If you're talking about Vanguard, I stand corrected. Didn't realize you could draw checks on an IRA to qualify for a QCD. I've never drawn a check on my Vanguard accounts in the 35 years I've been with them.
Gill

sport
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Re: What is best strategy for taking RMD from VG IRA

Post by sport » Thu Apr 19, 2018 2:55 pm

Checks can be drawn on money market accounts and some bond funds. There is a minimum check size of $250. Technically, they are drafts, not checks. However, this does not affect the writer of these drafts.

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celia
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Re: What is best strategy for taking RMD from VG IRA

Post by celia » Thu Apr 19, 2018 3:15 pm

Lynette wrote:
Thu Apr 19, 2018 12:03 pm
Yes, but this means that I have to keep track of them. So if I make 30 small QCDs, I have to keep track of all of them. It is much easier if I only have 4 of them that I have to aggregate and on on my 1040.
I certainly hope you aren't donating to 30 different charities. Even 10 would be too much for us and the paperwork would be annoying.

DH and I decided to limit the number of charities we support so we wouldn't be subject to an ever-increasing request for donations in the mail. We now just have a handful and send them one check a year. That simplifies the bookkeeping on our end.

I assume you are also aware that all your QCDs count against your RMD as long as they are the first withdrawals of the year. You have probably reduced your RMD already. The entire RMD (up to $100,000 a year per taxpayer--over age 70.5) can be covered by QCDs.

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David Jay
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Re: What is best strategy for taking RMD from VG IRA

Post by David Jay » Thu Apr 19, 2018 3:45 pm

RetiredInTN2017 wrote:
Thu Apr 19, 2018 9:39 am
I am 69 and trying to analyze the best strategy for removing my required RMD amount from my Vanguard IRA when I reach 70 next year. My VG IRA account is made up of the following 10 accounts.
VEXAX 3%
VIGAX 1%
VBILX 1%
VBIRX 1%
VBTLX 28%
VTABX 4%
VTIAX 17%
VTSAX 32%
VWIAX 6%
VWENX 6%
Presently this is 51% stocks and 49% bonds. My first idea was to have 4% taken from each fund annually, paid in monthly installments and taxed at 22%. Presently my wife and live comfortably on my pensions and small rent income which amounts to $65K annually. Maybe there is a better way to take from the funds or distribute and I am open to suggestions.
Back to "Retired" and his questions: I would certainly move money out of the funds that are 1% of your portfolio, that is too small to do anything (good or bad) for your performance. That takes you from 10 funds to 7 funds. There is no issue - recordkeeping or tax related - with moving money between funds in an IRA.

If you have no specific reason for holding the 3% and 4% funds, I would also consider consolidating those into larger funds. A 3-4% holding might have a tiny effect on your portfolio but likely not worth the bother in my opinion.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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celia
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Re: What is best strategy for taking RMD from VG IRA

Post by celia » Thu Apr 19, 2018 6:23 pm

RetiredInTN2017 wrote:
Thu Apr 19, 2018 9:39 am
I am 69 and trying to analyze the best strategy for removing my required RMD amount from my Vanguard IRA when I reach 70 next year. My VG IRA account is made up of the following 10 accounts.
I think the best strategy for you depends on your overall portfolio, if you need the RMDs for living expenses or not, and if you take the RMDs in-kind or not.

RetiredInTN2017, you are probably showing us a small part of your holdings, I assume, and can't tell if you are trying to cover living expenses, be tax-efficient, trying to simplify, withhold the taxes from the RMD or not, or just want to simply meet the IRS requirements.

So there is no answer to your question without giving us more context.

(We probably even went off-topic on this thread, possibly because of not-enough-information.)

Lynette
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Re: What is best strategy for taking RMD from VG IRA

Post by Lynette » Thu Apr 19, 2018 6:54 pm

celia wrote:
Thu Apr 19, 2018 3:15 pm
Lynette wrote:
Thu Apr 19, 2018 12:03 pm
Yes, but this means that I have to keep track of them. So if I make 30 small QCDs, I have to keep track of all of them. It is much easier if I only have 4 of them that I have to aggregate and on on my 1040.
I certainly hope you aren't donating to 30 different charities. Even 10 would be too much for us and the paperwork would be annoying.

DH and I decided to limit the number of charities we support so we wouldn't be subject to an ever-increasing request for donations in the mail. We now just have a handful and send them one check a year. That simplifies the bookkeeping on our end.

I assume you are also aware that all your QCDs count against your RMD as long as they are the first withdrawals of the year. You have probably reduced your RMD already. The entire RMD (up to $100,000 a year per taxpayer--over age 70.5) can be covered by QCDs.
Only three charities :D But I did a test run at the beginning of the year as this was the first year I was eligible to do QCDs. I retired at 73 but did not have to take RMDs as my 401K was with my employer. I could not do QCDs last year as my only tax deferred account was a 401K and one cannot take QCDs from a 401Ks. I rolled over my 401K equally to Fidelity and Vanguard at the end of last year.

For my test run, I got checks from Fidelity and Vanguard for these three charities. I also asked the charities to send me an acknowledgement of receipt that I have received. I am going to give larger checks to these three charities. I was discussing the value of sending one large check to a charity instead of multiple small ones. One organization that I support is my church. I used to send them monthly contribution. Now it will only be one larger check.
Last edited by Lynette on Thu Apr 19, 2018 7:51 pm, edited 1 time in total.

boffalora
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Re: What is best strategy for taking RMD from VG IRA

Post by boffalora » Thu Apr 19, 2018 7:34 pm

I keep enough for two years' RMDs in Prime Money Market (within my traditional IRA) independent of my asset allocation. Were interest rates still in a downward trajectory I'd probably hold that sum in either Short Term Investment Grade or Intermediate Term Investment Grade, but for now PMM suits my needs and allows me to sleep at night while maintaining my desired long term asset allocation between the other funds.

My RMD (including QCD) is taken from the above Prime Money Market portion of the IRA. I replenish the PMM sum from my other funds while rebalancing between the others at an opportune time. That is, I try to avoid doing it in a down market. Again, keeping two years' RMDs in cash enables me to do so when I please.

Not a precision procedure, but for me it works.

jpsc
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Re: What is best strategy for taking RMD from VG IRA

Post by jpsc » Thu Apr 19, 2018 8:00 pm

You should look at your bond funds and just move/consolidate to Vanguard Target Retirement income trust

trueblueky
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Re: What is best strategy for taking RMD from VG IRA

Post by trueblueky » Thu Apr 19, 2018 9:26 pm

sport wrote:
Thu Apr 19, 2018 2:55 pm
Checks can be drawn on money market accounts and some bond funds. There is a minimum check size of $250. Technically, they are drafts, not checks. However, this does not affect the writer of these drafts.
A $250 check is not proof for IRS, so you must obtain a receipt from the charity. A $249 check is proof, so the limit is an issue.

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Re: What is best strategy for taking RMD from VG IRA

Post by rotorhead » Fri Apr 20, 2018 11:21 am

OP, those are all very good funds; but there are too many in my opinion. Any holding representing less than 5% of your portfolio is not going to "move the needle" much either way. Only adds to your admin burden. I would first simplify to three funds - VTSAX, VSIAX & VBILX would accomplish all that your current portfolio does; if you wish to continue with international. Or even two funds, VTSAX & VBILX, if you want to eliminate International. As the years pass, you will appreciate less admin effort.

That's my "editorial" comment; and now for my suggestion:

I don't pretend to be all knowing on the subject; but I am in my 7th year of RMD now; and over time, have developed a system that works well for us. As it happens, with my pension and SS, we haven't had to withdraw more than the minimum except for one year (new roof!).

My account is with Fidelity, with only two funds - Total Market & Total Bond. I have it set up so that withdrawal is on the 20th of the month, from the bond fund. Each month Fidelity automatically sells the requisite number of bond shares about 2-3 days before the 20th. Weekends, holidays, etc., can cause slight variation occasionally; and then on the 20th the cash is transferred to my bank checking account.

Of course, this causes our allocation spread to increase a bit as the year goes along; and then in December I re-balance from our equity fund as/if necessary. I feel this method allows me to capture a little of the market increase during the year without being too guilty of market timing :) . I also have pension which deposits on 1st of the month; and SS deposits on 2nd Wednesday each month. So with this withdrawal on the 20th, my monthly cash flow is pretty smooth.

I have some income tax withheld at source for pension, IRA & SS. No fuss, no muss. No worries about end-of-year scrambling. For 2017 my tax refund was $54. Not bad.

Works for us.

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LadyGeek
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Re: What is best strategy for taking RMD from VG IRA

Post by LadyGeek » Sun Apr 22, 2018 8:49 am

New member TheCreeker has a question which I've moved into a stand-alone thread: [How do I send my Qualified Charitable Distribution to a charity]?

This thread is now in the Personal Finance (Not Investing) forum (withdrawal strategy).
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