REWahoo
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Good info.
I included the inherited IRA qualifier in my response only because I have not looked at the revised RMD requirements for inherited IRAs. Sorry if it caused any confusion.
No RMD's in 2020
- Thread starter gerntz
- Start date
Good info.
I included the inherited IRA qualifier in my response only because I have not looked at the revised RMD requirements for inherited IRAs. Sorry if it caused any confusion.
aja8888
Moderator Emeritus
I just finished a test on TT for next year's taxes without my RMD (haven't taken it yet). Since we have no pensions and just SS, without my RMD, I will pay $0 in Fed tax! 
(using after tax cash account to get through the year)
(using after tax cash account to get through the year)
N02L84ER
Thinks s/he gets paid by the post
You should add RMDs in TT until the tax gets to be greater than 0. That way you will not be wasting any of the tax free space.I just finished a test on TT for next year's taxes without my RMD (haven't taken it yet). Since we have no pensions and just SS, without my RMD, I will pay $0 in Fed tax!
(using after tax cash account to get through the year)
just a reminder ..............that probably none of you need. Some folks are detail-oriented focusing on the minutia like when the tax filing is due, when the tax payment is due, when the estimated tax is due. With Federal and state and time-varying requirements as the institutions change their mind, there has been a lot to keep up with. Now comes the no RMD rule for 2020 and I am wondering if the institutions will institute something of their own (guessing not) or whether you have to customize any auto-RMDs that you have. In the midst of all this, and having had relatively stable income for the past few yrs, I have estimated tax numbers on my brain. Only today did I integrate the whole process and realize that the estimated tax payments will be cut in half due to no (more) RMDs........so don't make the same mistake.
SecondCor521
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
It'd be nice if Vanguard (and other IRA custodians) would develop an option to suspend auto-RMDs until 1/1/21 and then restart them. I'll wait a few days for them to get the code written before giving them a call...
My Dad does federal withholding as part of his Vanguard auto-RMD; may be an option for you rather than estimated payments...?
aja8888
Moderator Emeritus
Agreed! That's the next exercise. Another issue will be when the additional income added in triggers taxing our SS income significantly.
I really have to have a better guess at the interest I will end up adding into taxable as income as I have a pot full of CD's. But that's not too hard to get close with.
I believe that is incorrect. There is only a minor correlation of QCDs and RMDs.....that is, if you want to be efficient and withdraw as little as possible,you will make the QCDs part of the RMD.
On the other hand, if you had already taken your RMD, you can still take QCDs.
For this yr, the RMD is 0, but you can take your QCDs as in any other yr.
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I just finished a test on TT for next year's taxes without my RMD (haven't taken it yet). Since we have no pensions and just SS, without my RMD, I will pay $0 in Fed tax!
(using after tax cash account to get through the year)
I’d even go a little further and fill up the 10% bracket. Might not be much, but it’s 10%. Pretty darn low.
I top off to the 0% bracket. Loss of ACA makes the 10% bracket a lot more than 10%... something like 24%.
socaldonnan
Recycles dryer sheets
As I just found out about the suspension of RMDs, do I assume DH needs to get in touch with Vanguard to request the suspension? I mentioned this suspension to a friend and she advised me that her advisor at Morgan Stanley sent her an email addressing this. We are Flagship clients guess we aren’t that special. [emoji4]
sounds like a good idea unless you want VG to guess whether you want the suspension or not. That would be a risky thing for anyone to assume. The best solution is for the custodians to send you a letter w/ the action/no-action consequences. Even that has some risk if you don't receive or read it.
Souschef
Thinks s/he gets paid by the post
I readjusted my estimated taxes for the year downward. I had already taken half my RMD in January and February before the market tanked.
I will take the money i have allocated for the rest of the year out of my taxable account.
It sure is nice paying only 15% on the CG instead of 22% on the whole amount.
I will take the money i have allocated for the rest of the year out of my taxable account.
It sure is nice paying only 15% on the CG instead of 22% on the whole amount.
SecondCor521
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Vanguard, I'm sure, has to follow client instructions. To do otherwise would be to invite lawsuits of financial malpractice.
If you have standing instructions in place, such as my Dad does for a monthly automatic RMD, I'm sure that will continue to take place until or unless you direct otherwise.
Vanguard may provide a newsletter or email advising clients of the options and how to do so, but I'm sure they'll wait for affirmative statements from clients to follow. Without you telling them, they have no way of knowing whether you want to continue with your RMDs or not.
Amethyst
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Re RMDs, VG won't do anything you don't tell them to do.
Vanguard sends Mr. A a note each year, reminding him to take his RMD, and inaccurately estimating the amount. He uses the table for people whose spouses are 10+ years younger, while VG estimates the "full" RMD.
Vanguard sends Mr. A a note each year, reminding him to take his RMD, and inaccurately estimating the amount. He uses the table for people whose spouses are 10+ years younger, while VG estimates the "full" RMD.
ncbill
Thinks s/he gets paid by the post
My Fidelity home page used to have a section devoted to reminding me "we estimate you will need to take a RMD of $xxxx this year" but now that has disappeared.
I was on the VG web site a couple of days ago arranging a QCD. I double-checked to make sure I had no RMDs scheduled as I want to take advantage of the waiver. To my surprise, there was no mention of the fact that RMDs need not be taken this year. I would have thought there would have been an attention-grabbing banner or a pop-up on the page where you go to arrange RMDs.
Nath, it's VG way. No admin effort beyond what you beg for (jk)
Amethyst
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youbet
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I'm not a Vanguard customer, but I'd think their main reason for not aggressively proclaiming the RMD 2020 suspension is that they must not give tax advise. So, the most they could say is something like "Congress has suspended RMD's for 2020 making IRA withdrawals optional. Consult with your tax advisor to determine your best course of action. Vanguard has no recommendation regarding this tax matter."
Just my guess.
Amethyst
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No doubt you are correct. They could at least mention it though. "For questions about the impact of the CARES Act on your 2020 RMD, please consult a tax professional."
youbet
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I certainly agree that they could do that and in the unlikely event a DIYer is unaware of the CARES Act, that would give them a heads-up.
FYI - I just went into my Schwab rollover IRA acct and looked. On the page which shows how much your RMD is for 2020 and how much have have taken so far, there is no mention of the current 2020 waiver. Also, on the page where you set up your RMD (tell them the amount you currently want withdrawn, the tax withholding, etc.) there is no mention. So, from what I can see, Schwab is also taking a low profile in appearing to be driving action or inaction on the site.
I do subscribe to several of the Schwab info-emails that contain articles or videos on various subjects. The waiver was mentioned in one of those.
Vanguard customers are generally DIYers. I'm thinking there aren't many folks doing it on their own with a low cost, on-line-only brokerage like Vanguard that are unaware of the RMD waiver. If there is someone, they should likely reconsider their DIY status since the CARES Act has been so widely publicized.
At least they , if you inform them (VG) of what you want to do, do seem to have a way to suspend the 2020 RMDs and automatically turn them on for 2021 , like Fidelity and TIAA.
There are some companies, however, (the last on my checklist who shall go unnamed) who hear nothing , see nothing, and know nothing. I bug them every 2 days which is how long they says for them to send a message to management and get a response. No change so far.........
There are some companies, however, (the last on my checklist who shall go unnamed) who hear nothing , see nothing, and know nothing. I bug them every 2 days which is how long they says for them to send a message to management and get a response. No change so far.........
SecondCor521
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Can you explain a bit about this? Do you call in, or go on their site to the RMD page, or what?
My Dad may want to suspend his 2020 RMD at some point, and turn it back on automatically in 2021, so this is of interest.
Thanks.
I called them. In one case it was an IRA and for the other a company 401K so I had to speak to 2 different reps but they seemed to be aware of what to do.....I had called a few days earlier and the 401K was unaware so I gave them a few days and they came through. Be good to verify tho I believe VG sends a letter in January advising you of coming yr RMD amount but may have to verify the autowithdrawal part independently.
