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Vanguard insisting on RMDís
Old 11-26-2020, 12:40 PM   #1
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Vanguard insisting on RMDís

Iím being notified that I must begin RMDís from Vanguard. They insist that I begin 2021. My birthday is Dec 1949. The SECURES act says that I have until Iím 72 1/2 y/o to begin withdrawals. I calculate that to be June 2022, or I could begin Jan 2022. Nothing like jumping the gun early.

Am I missing something or mis reading this information.
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Old 11-26-2020, 12:46 PM   #2
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Quote:
Originally Posted by Bflotomny View Post
Iím being notified that I must begin RMDís from Vanguard. They insist that I begin 2021. My birthday is Dec 1949. The SECURES act says that I have until Iím 72 1/2 y/o to begin withdrawals. I calculate that to be June 2022, or I could begin Jan 2022. Nothing like jumping the gun early.

Am I missing something or mis reading this information.
It's 72, not 72.5. And you will be 72 in December 2021.
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Old 11-26-2020, 12:47 PM   #3
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I thought the act changed the age from 70-1/2 to 72. If so that may be why.
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Old 11-26-2020, 12:48 PM   #4
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RMDs
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Old 11-26-2020, 02:18 PM   #5
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^^^^ Committee Chairs are Mr. Plural and Ms. Possessive.
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Old 11-26-2020, 02:27 PM   #6
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Originally Posted by Bflotomny View Post
I’m being notified that I must begin RMD’s from Vanguard. They insist that I begin 2021. My birthday is Dec 1949. The SECURES act says that I have until I’m 72 1/2 y/o to begin withdrawals. I calculate that to be June 2022, or I could begin Jan 2022. Nothing like jumping the gun early.

Am I missing something or mis reading this information.
You actually have until April 1 of the year after you turn 72 to take your RMD, so you could wait until early 2022 to take it. However, you will have to take the second RMD (for the year you turn 73) by December 31, 2022; so if you wait, you'll end up with two RMDs counting as income in that year. If you expect to have a lot more income in 2021, e.g. from selling a rental property or something like that, it might make sense to wait and take both RMDs in 2022.

One interesting wrinkle for you is that your second RMD may be less than your first (depending on how your IRA investments grow). The IRS has published new life expectancy tables for RMDs starting in 2022. You'll have to calculate your first withdrawal using the old tables even if you wait until 2022 to receive it, so you'll use a life expectancy of 25.6 for age 72. But for your second RMD, you'll use the new tables which give a life expectancy of 26.5 for a 73 yr old.

And Vanguard can't require you to take it from the accounts they hold. If you have an IRA somewhere else, you are free to take the entire RMD from that account. It's entirely your responsibility to calculate the amount you have to take and then to figure out which accounts to withdraw it from in order to comply with the law.
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Old 11-27-2020, 06:29 AM   #7
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Originally Posted by davebarnes View Post
RMDs
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LOL There are a lot of similar plural acronyms that most people add apostrophes to, like "CGs.". I usually don't but sometimes wonder if most people will think I don't know how to spell.
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Old 11-27-2020, 07:59 AM   #8
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RMDs
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Depending on which source you think is authoritative, and maybe also on where you stand on prescriptivism or descriptivism, pluralizing acronyms by adding an apostrophe and an "s" can be considered acceptable practice in the English language.
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Old 11-27-2020, 08:24 AM   #9
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Depending on which source you think is authoritative, and maybe also on where you stand on prescriptivism or descriptivism, pluralizing acronyms by adding an apostrophe and an "s" can be considered acceptable practice in the English language.
That sound's right to me.
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Old 11-27-2020, 08:26 AM   #10
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RMDs
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Quote:
Originally Posted by SecondCor521 View Post
Depending on which source you think is authoritative, and maybe also on where you stand on prescriptivism or descriptivism, pluralizing acronyms by adding an apostrophe and an "s" can be considered acceptable practice in the English language.
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That sound's right to me.
Ya'll need to settle down.
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Old 11-27-2020, 09:08 AM   #11
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Originally Posted by Bflotomny View Post
Iím being notified that I must begin RMDís from Vanguard. They insist that I begin 2021. My birthday is Dec 1949. The SECURES act says that I have until Iím 72 1/2 y/o to begin withdrawals. I calculate that to be June 2022, or I could begin Jan 2022. Nothing like jumping the gun early.

Am I missing something or mis reading this information.
Vanguard is correct, unless you plan to delay to April 2022, but then you have to take 2 RMDs that year.
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Old 11-27-2020, 10:00 AM   #12
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^^^ True, but as kathy posted, Vanguard can't force you to take RMD... they have no way of knowing what other IRAs you have with other administrators and that you might be taking your RMD from those other IRAs.
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Old 11-27-2020, 10:05 AM   #13
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It's 72, not 72.5. And you will be 72 in December 2021.
Right.
A bit of confusion on the OP's part, but understandable.

Here's the skinny from the IRS:
Quote:
Beginning date for your first required minimum distribution
IRAs (including SEPs and SIMPLE IRAs)
  • April 1 of the year following the calendar year in which you reach age 70Ĺ, if you were born before July 1, 1949.
  • April 1 of the year following the calendar year in which you reach age 72, if you were born after Jun 30, 1949.
401(k), profit-sharing, 403(b), or other defined contribution plan
Generally, April 1 following the later of the calendar year in which you:
  • reach age 72 (age 70Ĺ if born before July 1, 1949), or
  • retire (if your plan allows this).
https://www.irs.gov/retirement-plans...ributions-rmds
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