Vanguard RMD service and COVID-19

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jgalt133
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Joined: Fri Feb 24, 2017 4:50 pm

Vanguard RMD service and COVID-19

Post by jgalt133 » Tue Mar 31, 2020 11:45 am

Does anyone know if we can instruct Vanguard to skip our RMD for 2020? I signed up for their RMD service and it's scheduled to post in mid-December.

jebmke
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Re: Vanguard RMD service and COVID-19

Post by jebmke » Tue Mar 31, 2020 11:48 am

Just tell them not to distribute. It's your money.
When you discover that you are riding a dead horse, the best strategy is to dismount.

Alan S.
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Re: Vanguard RMD service and COVID-19

Post by Alan S. » Tue Mar 31, 2020 11:51 am

jgalt133 wrote:
Tue Mar 31, 2020 11:45 am
Does anyone know if we can instruct Vanguard to skip our RMD for 2020? I signed up for their RMD service and it's scheduled to post in mid-December.
Fortunately, no distribution has occurred in 2020. You can simply go on the VG site and terminate the RMD service. And verify that it has been terminated. You will not get the Dec distribution.

Topic Author
jgalt133
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Joined: Fri Feb 24, 2017 4:50 pm

Re: Vanguard RMD service and COVID-19

Post by jgalt133 » Tue Mar 31, 2020 11:52 am

Alan S. wrote:
Tue Mar 31, 2020 11:51 am
Fortunately, no distribution has occurred in 2020. You can simply go on the VG site and terminate the RMD service. And verify that it has been terminated. You will not get the Dec distribution.
Ok, then in the following year I would have to set it back up again? That seems like a simple solution (but not as simple as a "skip this year" button). Thanks!

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colodane
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Re: Vanguard RMD service and COVID-19

Post by colodane » Tue Mar 31, 2020 4:41 pm

jgalt133 wrote:
Tue Mar 31, 2020 11:52 am
Alan S. wrote:
Tue Mar 31, 2020 11:51 am
Fortunately, no distribution has occurred in 2020. You can simply go on the VG site and terminate the RMD service. And verify that it has been terminated. You will not get the Dec distribution.
Ok, then in the following year I would have to set it back up again? That seems like a simple solution (but not as simple as a "skip this year" button). Thanks!
It has been less than 2 business days since the new law was signed. As long as you haven't signed up with Vanguard for a RMD in the coming few weeks, I'd just wait for awhile. I think that Vanguard, when they have had time to react, may indeed issue some guidance on how to proceed and/or change their website with an easy "skip this year due to CARES" button. If not, then just cancel the distribution this year an make a note to start it up again for next year.

mailman781
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Re: Vanguard RMD service and COVID-19

Post by mailman781 » Tue Mar 31, 2020 5:49 pm

jgalt133 wrote:
Tue Mar 31, 2020 11:52 am
Alan S. wrote:
Tue Mar 31, 2020 11:51 am
Fortunately, no distribution has occurred in 2020. You can simply go on the VG site and terminate the RMD service. And verify that it has been terminated. You will not get the Dec distribution.
Ok, then in the following year I would have to set it back up again? That seems like a simple solution (but not as simple as a "skip this year" button). Thanks!
Yesterday, 3/30/20, I telephoned Vanguard. I canceled our 2020 scheduled RMD distributions and set up news scheduled distributions for 2021. No trouble at all. The Vanguard agent took care of it all. Actually, I was surprised that he could set up the 2021 schedule now.

moneylove
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Re: Vanguard RMD service and COVID-19

Post by moneylove » Sun Apr 19, 2020 12:44 pm

Following the Covid allowance, I did NOT take my usual IRA RMD this first quarter 2020. Instead, I transferred one quarter’s RMD amount from my IRA into my ROTH. I expect to pay the same income tax I’ve always paid on ONE quarter’s RMD. Will this tax plan work as I hope it will? (My longevity, total net worth and liquidity are not an issue). Stocks are down, maybe I should transfer my whole IRA now and bite the bullet. Thanks everyone!

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CAsage
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Re: Vanguard RMD service and COVID-19

Post by CAsage » Sun Apr 19, 2020 3:31 pm

moneylove wrote:
Sun Apr 19, 2020 12:44 pm
Following the Covid allowance, I did NOT take my usual IRA RMD this first quarter 2020. Instead, I transferred one quarter’s RMD amount from my IRA into my ROTH. I expect to pay the same income tax I’ve always paid on ONE quarter’s RMD. Will this tax plan work as I hope it will? (My longevity, total net worth and liquidity are not an issue). Stocks are down, maybe I should transfer my whole IRA now and bite the bullet. Thanks everyone!
Yes, a Roth conversion will result in the same tax impact as a RMD withdrawal. The right plan for converting in general depends on your current and future tax bracket, and there are lots of specific threads about those trade-offs. I pumped mine up in March.
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

moneylove
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Re: Vanguard RMD service and COVID-19

Post by moneylove » Wed Apr 29, 2020 6:29 am

Is it true that I can only make one IRA to ROTH conversion in 2020?

moneylove
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Re: ROTHs.

Post by moneylove » Fri May 22, 2020 6:47 pm

I want to gift $6000 to my kids so they can invest during the Covid market. It's now May so they've only earned 2020's salary for 5 months. I don't know what their income is but...hypothetically they've only earned $4000 total salary January to now and will earn nothing more until December. Can they put the whole $6000 gift in now or must they wait until they've earned $6000.?

Alan S.
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Re: ROTHs.

Post by Alan S. » Fri May 22, 2020 6:56 pm

moneylove wrote:
Fri May 22, 2020 6:47 pm
I want to gift $6000 to my kids so they can invest during the Covid market. It's now May so they've only earned 2020's salary for 5 months. I don't know what their income is but...hypothetically they've only earned $4000 total salary January to now and will earn nothing more until December. Can they put the whole $6000 gift in now or must they wait until they've earned $6000.?
They can contribute the entire 6000 now, but if their earned income falls short of that they will have an excess contribution to remove. They might contribute 4000 now and contribute the additional amount once they have earned that income if they want to reduce the chance of their income falling short and having to remove an excess contribution.

Also, note that you can make as many conversions in a year that you wish to and are willing to pay the tax on.

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