RMD Question

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Mr. Potter
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RMD Question

Post by Mr. Potter »

My MIL moved from Waddell & Reed last year to Fidelity. She did take her RMD prior to the transfer back in January 2021. Now she just received a statement from Waddle & Reed that’s confusing, it reads: approximate numbers
Beginning balance 16,000
Normal distribution 12,000
Normal distribution withholding 3,000
Ending balance 1,000
Why is there an ending balance? Is that a fee of some sort, where did that 1k go?
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JoeRetire
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Re: RMD Question

Post by JoeRetire »

16,000 - (12,000 + 3,000) = 1,000

It appears that she still has a 1,000 balance with Waddell & Reed. Or at least she did at the time of the statement.
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Mr. Potter
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Re: RMD Question

Post by Mr. Potter »

Maybe Fidelity could answer this, it does look like Waddle and Reed held back some funds.
Alan S.
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Re: RMD Question

Post by Alan S. »

JoeRetire wrote: Sat Oct 16, 2021 8:42 am 16,000 - (12,000 + 3,000) = 1,000

It appears that she still has a 1,000 balance with Waddell & Reed. Or at least she did at the time of the statement.
The 3,000 is part of the 12,000 distribution not a separate distribution, but it is not clear what the date of the beginning balance is. It might be 12/31/2020 and prior to the RMD. How much was the RMD?

It should be simple to determine whether there is still a balance at Waddell and/or whether the account is closed.

Also, she should have a done a direct transfer to Fidelity. Now she has used up her one permitted rollover per 12 months, and if so she must wait until 12 months have passed from the distribution date of the 12,000 if she wants to do a 60 day rollover again, and if she waits until next year, her first distribution is deemed to apply against her 2022 RMD.

Finally, firms like Waddell typically have an exit fee, but no way should it be anywhere near 1000. You will probably have to call Waddell to get a complete explanation.
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JoeRetire
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Re: RMD Question

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Alan S. wrote: Sat Oct 16, 2021 11:37 am The 3,000 is part of the 12,000 distribution not a separate distribution
Why would you assume that?
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Kenkat
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Re: RMD Question

Post by Kenkat »

JoeRetire wrote: Sat Oct 16, 2021 12:01 pm
Alan S. wrote: Sat Oct 16, 2021 11:37 am The 3,000 is part of the 12,000 distribution not a separate distribution
Why would you assume that?
I would take it as a $12,000 distribution was processed, $3000 was withheld for taxes (25%), here’s a check for $9,000.
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JoeRetire
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Re: RMD Question

Post by JoeRetire »

Kenkat wrote: Sat Oct 16, 2021 12:04 pm
JoeRetire wrote: Sat Oct 16, 2021 12:01 pm
Alan S. wrote: Sat Oct 16, 2021 11:37 am The 3,000 is part of the 12,000 distribution not a separate distribution
Why would you assume that?
I would take it as a $12,000 distribution was processed, $3000 was withheld for taxes (25%), here’s a check for $9,000.
So if the balance is $1,000, where did the other $3,000 go?

(I took it as here's a check for $12,000 and we also withheld an additional $3000 for taxes. You now have $1,000 remaining. Thank you for your business.
But I admit that I have never seen a statement from Waddell & Reed.
Obviously, a quick call to Waddell & Reed would provide the correct answer.)
Last edited by JoeRetire on Sat Oct 16, 2021 12:25 pm, edited 1 time in total.
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Mr. Potter
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Re: RMD Question

Post by Mr. Potter »

Well I’m thinking the 12k + 3k + 1k obviously gets you to the total of 16k. The 1k of remaining balance just doesn’t make sense. I did just contact Fidelity, if they don’t know what’s going on I’ll contact Waddle & Reed. Not sure Waddle & Reed will be excited to help, this was fairly large account to lose.
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JoeRetire
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Re: RMD Question

Post by JoeRetire »

Oak&Elm wrote: Sat Oct 16, 2021 12:12 pmNot sure Waddle & Reed will be excited to help, this was fairly large account to lose.
Don't worry about that.

It might be large to you, it's inconsequential to them. (assets under management of around $76 Billion)
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Kenkat
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Re: RMD Question

Post by Kenkat »

JoeRetire wrote: Sat Oct 16, 2021 12:08 pm
Kenkat wrote: Sat Oct 16, 2021 12:04 pm
JoeRetire wrote: Sat Oct 16, 2021 12:01 pm
Alan S. wrote: Sat Oct 16, 2021 11:37 am The 3,000 is part of the 12,000 distribution not a separate distribution
Why would you assume that?
I would take it as a $12,000 distribution was processed, $3000 was withheld for taxes (25%), here’s a check for $9,000.
So if the balance is $1,000, where did the other $3,000 go?

(I took it as here's a check for $12,000 and we also withheld an additional $3000 for taxes. You now have $1,000 remaining. Thank you for your business.
But I admit that I have never seen a statement from Waddell & Reed.
Obviously, a quick call to Waddell & Reed would provide the correct answer.)
Yes, my math doesn’t make sense. $15,000 distribution, $3,000 to IRS, $12,000 check. :oops:

I don’t really understand how the transfer occurred between Waddell & Reed and Fidelity occurred. Was it a trustee to trustee transfer - but then why were taxes withheld, and why not for the full balance - or a partial taxable distribution sent to a Fidelity account?
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Mr. Potter
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Re: RMD Question

Post by Mr. Potter »

The RMD took place a month before the transition to Fidelity. It was just a IRA rollover, I did liquidate everything to cash before moving if that makes any difference
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