[RMD shortfall - issue fixed]

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legio XX
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[RMD shortfall - issue fixed]

Post by legio XX » Sat Jan 11, 2020 8:49 am

Title updated by OP.

[Title was "Vanguard another RMD snafu [solved!]", see solution below. --admin LadyGeek]

Has anyone else had this problem? What is the best way to fix this and (maybe) not have it happen again?

I had VG set up to automatically take my RMDs on January xx. It worked OK the last few years, but this year they took less than 10% of the calculated RMD from one acc't. Sure enough, the acc't info online alerted me to an under-distribution, but none of the links let me do anything about it. One said "enter a later date" - where?!?! - there was nowhere to enter anything. The other was a "contact" button that also went nowhere.
I had not asked for any change of RMD distribution.
OK, so as soon as they open up on Monday I'll waste a lot of time trying to get this cleared up, but I am not a satisfied customer. (I swear they used to have weekend customer service. Is this a good-old-days delusion or am I confusing them with someone else?)

[deleted no longer relevant comment. The statements showed up.]

Looking into moving the accounts, but there's a lot of cap gains tax to be avoided so I'll go carefully.
Last edited by legio XX on Mon Jan 13, 2020 9:25 pm, edited 3 times in total.

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HueyLD
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Re: Vanguard another RMD snafu

Post by HueyLD » Sat Jan 11, 2020 8:57 am

If you do an ACATS, you can transfer securities without having to sell them.

stan1
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Re: Vanguard another RMD snafu

Post by stan1 » Sat Jan 11, 2020 9:08 am

I would call Vanguard on Monday and tell the automated voice system you need RMD help. That should transfer you to RMD specialist. I'm not entirely following the details of what you wrote so I'd call Vanguard so they can look at your account and discuss with you. I think what you are describing is a situation unique to your account.

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legio XX
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Re: Vanguard another RMD snafu

Post by legio XX » Sat Jan 11, 2020 9:22 am

HueyLD wrote:
Sat Jan 11, 2020 8:57 am
If you do an ACATS, you can transfer securities without having to sell them.
Thanks! Will look that up.

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legio XX
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Re: Vanguard another RMD snafu

Post by legio XX » Sat Jan 11, 2020 11:38 am

stan1 wrote:
Sat Jan 11, 2020 9:08 am
I'm not entirely following the details of what you wrote . . . I think what you are describing is a situation unique to your account.
Sorry to get off on a tangent. I have to do RMDs for two accounts. The date for the transaction and the withholding have been set up since I started RMDs. I got email confirmations that the transactions had taken place, but one was way lower than usual. I logged on to check this, and there was a warning that I hadn't taken the full RMD, might face a penalty, etc. There were links to make changes, but they were not functioning (or are beyond my technical capabilities).

So, if others haven't had this problem, good. Not looking forward to facing the system but obviously have to do it.
As if bleepin' taxes weren't enough . . .

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ResearchMed
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Re: Vanguard another RMD snafu

Post by ResearchMed » Sat Jan 11, 2020 12:33 pm

I don't believe there is any reason to label a withdrawal (with or without withholding) as an "RMD".

We just withdraw an amount and request taxes be withheld if needed.

Those withdrawals just "become" our RMDs.

Why can't you just have whatever amount is needed withdrawn, withhold any taxes you wish, and... done?
Or is there something special about your accounts that you can't take regular, plain vanilla withdrawals and *must* "label them"??

RM
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Re: Vanguard another RMD snafu

Post by bondsr4me » Sat Jan 11, 2020 12:39 pm

legio XX wrote:
Sat Jan 11, 2020 9:22 am
HueyLD wrote:
Sat Jan 11, 2020 8:57 am
If you do an ACATS, you can transfer securities without having to sell them.
Thanks! Will look that up.
+1....Fidelity or Schwab would be very reliable alternatives.

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Re: Vanguard another RMD snafu

Post by fposte » Sat Jan 11, 2020 12:47 pm

Presumably these are RMDs for 2020, so at least you have a lot of time to sort this out.

In my account, when I go to the "My Accounts" menu tab, select "Retirement contributions, distributions, and RMDs" from the dropdown menu, and then click on the "Required minimum distribution" tab, I see a warning that I haven't taken my RMD, information about the RMD, and two big buttons that say "Set up automatic distributions" or "Take your RMD now." Do you have those buttons? If so, can you click on "Take your RMD now" and just select the remaining RMD amount to take?

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Re: Vanguard another RMD snafu

Post by Alan S. » Sat Jan 11, 2020 2:06 pm

Since this service evidently worked OK in prior years, and if you have had 2 IRA accounts all along, you would have had to decide in the past whether to have the RMD satisfied separately for each account or "aggregated".

Aggregation of RMDs is allowed between all your IRA accounts including those held with other custodians. If you set up an aggregated RMD in the past, you would have had to specify HOW to aggregate the RMD between the two accounts.

For instance, you could indicate that the entire RMD be taken from just one account. Any other combinations are also legal but complexity invites errors. For example, what happens if you added a new account or transferred amounts between accounts? Or how are QCDs handled?

If you use a service, best to avoid detailed or complex RMD instructions. Remember, that any changes you make to your accounts could affect the prior RMD service instructions, particularly if they were complex to begin with.

Next year, it is expected that new IRS RMD tables will apply. If you continue with this service, I would change your first RMD date to avoid Jan or Feb. That allows time for VG to make sure their divisors are correctly updated.

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Re: Vanguard another RMD snafu

Post by 123 » Sat Jan 11, 2020 2:25 pm

Alan S. wrote:
Sat Jan 11, 2020 2:06 pm
Since this service evidently worked OK in prior years...
Alan S. has likely correctly identified the issue as an RMD issue involving more than one IRA account. From my experience with inherited IRAs RMDs in the past it seemed that the Vanguard automatic RMD service was superior to what was available at the time from other brokers, like Schwab or Fidelity. One of our reasons for keeping an inherited IRA at Vanguard was their superior automated RMD service. At the time Vanguard had an automated sell of specific positions as part of the RMD service, whereas Schwab and Fidelity did not. Maybe Schwab and Fidelity has improved since then but I haven't checked.
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Re: Vanguard another RMD snafu

Post by zengolf2011 » Sat Jan 11, 2020 2:32 pm

Admittedly, my situation was different than yours. I made a mistake myself in withdrawing last year's RMDs (which, as mentioned previously, need not be characterized specifically at RMDs). Totally my fault -- I made a mistake by withdrawing more than intended, rather than the Vanguard-calculated RMD, which was correct. At any rate, I contacted Vanguard, was referred to an RMD specialist. He cautioned me that it would take a few days to fix my goof (which is a very good reason not to wait til the waning days of the year to take RMDs). At any rate, he was able to reverse my mistaken transaction and execute the proper one, explaining that you could only do this once a year. Just wanted to add this to defend my 25 years of excellent satisfaction with Vanguard's customer service. I'm sure Vanguard isn't perfect -- no organization is -- but they have always come through for me.

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Re: Vanguard another RMD snafu

Post by Alan S. » Sat Jan 11, 2020 6:34 pm

zengolf2011 wrote:
Sat Jan 11, 2020 2:32 pm
Admittedly, my situation was different than yours. I made a mistake myself in withdrawing last year's RMDs (which, as mentioned previously, need not be characterized specifically at RMDs). Totally my fault -- I made a mistake by withdrawing more than intended, rather than the Vanguard-calculated RMD, which was correct. At any rate, I contacted Vanguard, was referred to an RMD specialist. He cautioned me that it would take a few days to fix my goof (which is a very good reason not to wait til the waning days of the year to take RMDs). At any rate, he was able to reverse my mistaken transaction and execute the proper one, explaining that you could only do this once a year. Just wanted to add this to defend my 25 years of excellent satisfaction with Vanguard's customer service. I'm sure Vanguard isn't perfect -- no organization is -- but they have always come through for me.
It sounds like you actually did a 60 day rollover of the amount in excess of your RMD. You cannot roll over an RMD, but the amount in excess is not an RMD and can be rolled back subject to the one 60 day rollover allowed in a 12 month period.

You should expect a 1099R showing your total distributions and you will then have to report a rollover of the excess amount, leaving the balance distributed equal to your RMD.

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Re: Vanguard another RMD snafu

Post by legio XX » Sun Jan 12, 2020 2:25 pm

fposte wrote:
Sat Jan 11, 2020 12:47 pm
Presumably these are RMDs for 2020, so at least you have a lot of time to sort this out.

In my account, when I go to the "My Accounts" menu tab, select "Retirement contributions, distributions, and RMDs" from the dropdown menu, and then click on the "Required minimum distribution" tab, I see a warning that I haven't taken my RMD, information about the RMD, and two big buttons that say "Set up automatic distributions" or "Take your RMD now." Do you have those buttons? If so, can you click on "Take your RMD now" and just select the remaining RMD amount to take?
No, I don't have those buttons. I have an alert that I have taken $ x00 and am short $x000 of the calculated RMD. But, clicking on the "take action" hot link goes to a page that tells me to /!\ enter a later date /!\ with no way to do so. The calculation and distribution for the inherited IRA are fine, but my regular IRA is not. I guess I'll find out tomorrow what caused the screw-up. Will just be pushing it back in since I'm still working - and that should take care of the rebalancing for the year. I think.

Thanks for the suggestion.

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Re: Vanguard another RMD snafu

Post by meebers » Sun Jan 12, 2020 9:01 pm

I suppose that even automatic RMD withdraws will at some point cause some of the funds to drop below the minimum. i.e. Admiral funds would then drop out of Admiral status and revert back to non admiral?? :confused

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legio XX
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Re: Vanguard another RMD snafu [solved!]

Post by legio XX » Mon Jan 13, 2020 11:27 am

stan1 wrote:
Sat Jan 11, 2020 9:08 am
I would call Vanguard on Monday and tell the automated voice system you need RMD help. That should transfer you to RMD specialist. . . . I think what you are describing is a situation unique to your account.
100% correct. Easy solution. The problem was that my TIRA is spread over three funds and apparently when I set up the RMDs a few years back I told them to take it all from one fund. Oops. After several distributions that fund was short of the total RMD for 2020. The phone call was painless, the wait time less than 15 minutes, and the rep both pleasant and helpful.

I edited the title to show the fix.

rkhusky
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Re: Vanguard another RMD snafu [solved!]

Post by rkhusky » Mon Jan 13, 2020 11:45 am

Perhaps the OP title should be edited to show user error (i.e. not monitoring account balances and transactions), not Vanguard problem (apart from the UI issue).

stan1
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Re: Vanguard another RMD snafu [solved!]

Post by stan1 » Mon Jan 13, 2020 1:15 pm

legio XX wrote:
Mon Jan 13, 2020 11:27 am
stan1 wrote:
Sat Jan 11, 2020 9:08 am
I would call Vanguard on Monday and tell the automated voice system you need RMD help. That should transfer you to RMD specialist. . . . I think what you are describing is a situation unique to your account.
100% correct. Easy solution. The problem was that my TIRA is spread over three funds and apparently when I set up the RMDs a few years back I told them to take it all from one fund. Oops. After several distributions that fund was short of the total RMD for 2020. The phone call was painless, the wait time less than 15 minutes, and the rep both pleasant and helpful.

I edited the title to show the fix.
Glad the fix was easy and that you got good customer service from Vanguard.

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Re: Vanguard another RMD snafu [solved!]

Post by LadyGeek » Mon Jan 13, 2020 5:35 pm

rkhusky wrote:
Mon Jan 13, 2020 11:45 am
Perhaps the OP title should be edited to show user error (i.e. not monitoring account balances and transactions), not Vanguard problem (apart from the UI issue).
I further clarified the title.
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