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Fidelity WebSite Integrity?
Old 02-06-2024, 06:59 PM   #1
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Fidelity WebSite Integrity?

This may have been my mistake but I do not think it was when requesting an IRA RMD based on Fidelities specific figure down to pennies. I submitted the RMD form with a requested $500 tax withholding. Fidelity now tells me I made a cash withdrawal and not an RMD. I know I would not have done so with such an odd amount to the penny. Fidelity in turn calculated the tax withholding to $518.06, again an odd number I did not request. When talking to the round robin of Fidelity reps, none of which know the whole story so you quickly enter a circle of 'help', there is no resolution; the answer becomes 'you John Q Customer are wrong and tuff luck'. Am I missing something? I have high confidence I did not make a mistake. If I did, I would say the on-line software was not clear.
Have any of you had a similar experience with any brokerage and in particular, Fidelity?
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Old 02-06-2024, 08:59 PM   #2
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I’m confused. Any IRA withdrawal counts as an RMD until the RMD amount is satisfied for a given year. The RMD specifics or tax withholding I can’t answer to. Does Fidelity have some fixed %s of the amount for withholding instead of a dollar figure?

I don’t understand the “cash withdrawal” versus RMD distinction either. The alternative to cash is transferring some share in kind to a taxable account and you probably have to call in to do that and no withholding.
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Old 02-06-2024, 09:35 PM   #3
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I would print the RMD form so you can reference it while contacting your Fidelity rep directly. If you don’t have a Fidelity rep, then request one.
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Old 02-06-2024, 10:20 PM   #4
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I have not made any RMDs at Fidelity yet. I have done Roth conversions and set up a few recurring withdrawals. I have not had any problems. The Roth conversions were always done via telephone, so I didn't make any mistakes. It does get confusing, at least to me.

As mentioned already, any IRA withdrawal, whether it is cash to you or withholding, is considered an RMD up to the amount of required RMD for a given year. Perhaps you are not recounting the situation. I would be totally surprised if a Fidelity rep told me or anyone 'You John Q Customer are wrong and tuff luck'

If an office is near you, walk in and ask for someone to explain what happened in your transaction. If you accidently performed the transaction other than you intended, to explain how to do it so you know how to do it next time. Or you can simply call in and have them do the transaction for you. I have found Fido to be very helpful.
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Old 02-07-2024, 07:10 PM   #5
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Quote:
Originally Posted by Gkk2001 View Post
This may have been my mistake but I do not think it was when requesting an IRA RMD based on Fidelities specific figure down to pennies. I submitted the RMD form with a requested $500 tax withholding. Fidelity now tells me I made a cash withdrawal and not an RMD. I know I would not have done so with such an odd amount to the penny. Fidelity in turn calculated the tax withholding to $518.06, again an odd number I did not request. When talking to the round robin of Fidelity reps, none of which know the whole story so you quickly enter a circle of 'help', there is no resolution; the answer becomes 'you John Q Customer are wrong and tuff luck'. Am I missing something? I have high confidence I did not make a mistake. If I did, I would say the on-line software was not clear.
Have any of you had a similar experience with any brokerage and in particular, Fidelity?
It almost sounds like a fixed $ amount vs. a %. For example, Schwab only allowed me to do a % withholding, so the amount withheld was $30 different than what I wanted because the % amount is in whole increments and did not match the $ amount I wanted withheld from the sale. TD allowed me to choose a % or a fixed amount. Not sure what Fidelity does.

If that makes sense. Say you sell $1,100 and want $500 withheld. That is 45.4%, but they do whole % only so bump it up to 46% to get > $500, which in this case is $506. If you sold shares, the share price also can vary and I think they give you the whole sale vs. giving you the amount you asked for and leaving any delta in cash. I assume the process is detailed somewhere and can vary by broker or financial advisor. Anyhow, the share price and the % withheld are what causes small deltas for me from what I instruct.
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Old 02-08-2024, 06:25 AM   #6
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I suggest you try to contact Fidelity again and ask them to explain how they calculated your RMD and your tax withholding, and show them any proof or documentation that you have to support your claim.
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Old 02-08-2024, 08:16 AM   #7
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When I do an RMD (inherited IRA) at Fido, it only asks me what percentage I want to withhold for federal and state taxes. You can easily do that online, BTW, and even set up a schedule to always take your RMD on a specific date (just make sure you have enough cash or MM or ETFs for it, they won't sell stocks), and have it withhold taxes for you.
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Old 02-08-2024, 09:30 AM   #8
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Many many thanks for all the excellent replies. I have learned much thru this process. I believe every answer given above is correct. I wish the Fidelity reps were a little more knowledgeable but obviously that is life. I will use the main rep for my primary 'go-to' for advice. The odd dollar figure tax withheld being a percentage also makes sense.
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Old 02-11-2024, 12:50 PM   #9
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Quote:
Originally Posted by Gkk2001 View Post
. I submitted the RMD form with a requested $500 tax withholding.
Have any of you had a similar experience with any brokerage and in particular, Fidelity?
I am a few years away from RMD but I wanna be ready when the time comes! I was surprised to see the term ‘RMD Form’ as I thought it was no different than any other withdrawal. Checking the FAQ there seems to be no difference. Did you actually use a form and how did you submit? The FAQ does indicate the withholding instructions are formatted as a percentage and I know they can withhold for both state and federal taxes. You should see the details in the Activity Log for your IRA account.
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Old 02-11-2024, 03:06 PM   #10
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My experience with Fidelity is that any withholding is done as a percentage. I don't recall any option for a set dollar amount. I agree with previous replies, set up a mtg with a rep in the office, and go through what happened. It's good to be there in person instead of on the phone. Although, again my experience with Fidelity on the phone has been good as well. Especially for RMD on an inherited IRA for a trust that I am trustee for. It always requires a call to determine the RMD amount as trusts have different rules.
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Old 02-11-2024, 03:12 PM   #11
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Originally Posted by 38Chevy454 View Post
My experience with Fidelity is that any withholding is done as a percentage. I don't recall any option for a set dollar amount.
That's right. You can set any percentage you want, but they don't let you use a dollar amount.
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