Moemg
Gone but not forgotten
Luckily I was watching my account .Could you imagine just trusting Vanguard then finding this mistake a month later ?
Totally agree that it should be automated, but no need for a paper form... I have done 3 recharacterizations over the last few years and all have been by phone.
You can't get good help anymore.
When my Mom passed away about 18 months ago, I was expecting difficulty in working with Vanguard on the things that needed to be done. Vanguard surprised me by putting me in touch with their specialists in that area, and everything was done correctly, on time, and with no cumbersome hoops. Oh, and I think we were given a direct number to that area so we could just call them whenever we needed something.
Last week I got a message from Vanguard to call them regarding my RMD's .I had them set up to automatically happen on Jan.5 .I called and everything was fine until on Saturday I saw they took almost $20,000 more than the required amount . I called today and they admitted their mistake but it will take a week to fix . What is happening with Vanguard and what other companies do people use ?
This may not interest you but as I understand RMD's, it is often better to take the RMD in the later part of the year. First your investments accumulate tax free until then (stocks on balance go up).
Second there are no estimated taxes needed if you pay them with the final RMD withdrawal.
So my plan is:
January through November: take IRA distributions as needed up to RMD minus Fed tax due
December: take final RMD distribution equal to Fed tax due
This is my first RMD distribution year so hopefully I got this idea right. Corrections?
Depends on your tax bracket. Many here should take a traditional RMD early, a Roth later. If you taka a traditional RMD later you are paying ordinary income rate tax on the growth that year. By taking it early, you can put that money into a regular investment account until needed, and pay tax at the lower cap gain and dividend rates.
Depends on your tax bracket. Many here should take a traditional RMD early, a Roth later. If you taka a traditional RMD later you are paying ordinary income rate tax on the growth that year. By taking it early, you can put that money into a regular investment account until needed, and pay tax at the lower cap gain and dividend rates.
Screwing up someone personal finances that they've painstakingly planned out should not be dismissed as sh*t happens. Would you want that lazy mindset at your local nuclear power plant?
With the 2018 lower marginal rates I'm not sure this is an issue for many here. For instance, if you are retired and in the 12% rate range then is this a problem?
I like this idea,do any other members employ this strategy?
The amount subject to RMD is based on prior year's ending balance
Someone in the 12% bracket is likely to owe 0% on capital gains, in which case they will pay less tax, perhaps no tax, by having cap gains instead of ordinary income.
If I draw out RMD's at the beginning of 2018 and put it in an investment that generates cap gains, won't they be short term gains if needed for spending? I think short term gains are taxed at ordinary income levels. In our case we will want those RMD's for spending. So I guess this depends on one's income spending streams.
In that case to raise cash I'd simply sell a long term holding, such as one from the early RMD of the prior year.
We're Flagship clients so the level of service we received was probably much better than if we weren't.
After that positive experience, I eventually moved all of our investment accts to Vanguard. We haven't started taking RMDs yet, but I have no reason to believe we'll have any difficulties. Knock wood.