Skip RMD in 2020?

[explanade]

VG just emailed, noting that RMDs can be skipped.

Guess the idea is to conserve assets, not have to sell them at a much lower price than last year.

So just do nothing and no RMD for this year or do you have to take some action to indicate that you're skipping it as provided for in the CARES act?

 

[MichaelB]

Vanguard offers automatic RMD, and if you’ve selected that option you need to cancel it.

 

[SecondCor521]

As MichaelB indicates, if you're using Vanguard's automated service and don't want to take an RMD, you'll need to work with them to cancel it.

If you're not using the automated service and don't want to take your RMD, you can just not take it. There is no need to notify anyone or do anything.

You can also take less than your RMD amount if you wish. You can also, if you wish, do QCDs from your first dollar this year since RMDs are not required.

 

[braumeister]

Just skip it. We had made our RMD shortly before they changed it, and had Fidelity put it back in our IRA.
We'll most likely take it back out of the IRA anyway, by converting it into the Roth IRA instead. We didn't have taxes withheld on the RMD so nothing to think about there either.

 

[statsman]

We received the same notice recently. We only have to deal with my inherited IRA, and since it is under $100k, the RMD isn't all that much.

For the 2017 and 2018 tax years, we had tax withholding on the RMD to make sure we met safe harbor for those years. Most of the tax withholding comes from my pension. Because of a large capital gains bill in 2018, we used the withholding on the RMD in 2019 to make sure we met our 2019 tax obligations.

If we don't have any tax withholding issues for 2020, we'll skip the RMD. Otherwise, we might take a small portion from the inherited IRA to avoid any possible tax penalties. The inherited IRA is in Total Bond and TIPS funds, so at the moment for 2020 we wouldn't be selling for a loss.