Help with RMD please

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retiredjg
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Help with RMD please

Post by retiredjg »

Can someone explain this to me? I am new to the Vanguard brokerage platform.

A couple of weeks ago, I took my full RMD from my rollover IRA. Some went to a taxable brokerage account. Some went to my credit union. It all seemed fine.

As I watched the account for a week or so after that, it kept telling me I had not taken any RMD. I didn't worry about it because the RMD is between me and the IRS and Vanguard would not know if I took it from some other account.

Today, I signed on to do a Roth conversion. It told me I still had $49.89 to take on my RMD. I don't understand how that happened because I took the exact RMD in dollars.

Why didn't it take what I told it to take? Will it always be different from what I told it to take?
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David Jay
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Re: Help with RMD please

Post by David Jay »

Did you take it all from your settlement account, or did you use previous-day pricing for some of the mutual funds?

I could easily see a $50 difference if at, say, 2PM I calculated my number of shares and then the end-of-day stock price was lower than when I placed the order. I just had this with a Roth conversion. I used the current (showing) share price to calculate how many shares I was selling and the fund price closed higher, so my conversion amount was forty or fifty bucks more than I intended.

If you sell the funds to your settlement account and withdraw from there, you should be able to hit your RMD "to the penny".
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Re: Help with RMD please

Post by retiredjg »

David Jay wrote: Sat Sep 24, 2022 12:20 pm Did you take it all from your settlement account, or did you use previous-day pricing for some of the mutual funds?
It came from mutual funds. I don't know when the pricing was. Since it was from mutual funds, I assumed it would use the end of the day price and do the transactions after hours or the next day.

I could easily see a $50 difference if at, say, 2PM I calculated my number of shares and then the end-of-day stock price was lower than when I placed the order. I just had this with a Roth conversion. I used the current (showing) share price to calculate how many shares I was selling and the fund price closed higher, so my conversion amount was forty or fifty bucks more than I intended.
I did a sale, not a Roth conversion and there was no calculation of number of shares. It asked for dollars. I told it dollars. But a different dollar amount actually came out.

I do understand that for a Roth conversion, you tell it shares. But this was not like that. I specified the amount in dollars because that is what it asked for.

If you sell the funds to your settlement account and withdraw from there, you should be able to hit your RMD "to the penny".
I may try that, but that's extra steps and extra days. Not my preference.
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Re: Help with RMD please

Post by ResearchMed »

retiredjg wrote: Sat Sep 24, 2022 12:26 pm Since it was from mutual funds, I assumed it would use the end of the day price and do the transactions after hours or the next day.

IF the transaction is AFTER the close, then the price will be the *next* day's closing price.
When did you process the transaction?

The way it works with mutual funds is that transactions before the close get that day's closing price (except for a few cases where there may be delays).
Anything after that... is the same as a transaction made during the next day.

I'm guessing the price went down a bit on the next day's close?

RM
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Re: Help with RMD please

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I made the request during the day. I assumed the number of shares would be based on the price at the end of that day. But none of that addresses the question.

I did not sell a certain number of shares. I sold a certain number of dollars. And it didn't happen. Why not?
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ResearchMed
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Re: Help with RMD please

Post by ResearchMed »

retiredjg wrote: Sat Sep 24, 2022 2:39 pm I made the request during the day. I assumed the number of shares would be based on the price at the end of that day. But none of that addresses the question.

I did not sell a certain number of shares. I sold a certain number of dollars. And it didn't happen. Why not?

If you sold during the day, then you should have gotten the closing price, UNLESS there is some rule about the particular funds that the order needs to be placed before a certain time. I've seen 3:30, 3:00, and 2:00 pm at different places, times. But I think these were all for mutual funds that were from a *different* mutual fund company than the holding brokerage, e.g., a Fidelity fund being sold at TIAA (and I'm not sure if that delay actually takes place, or if it is just a warning to the client in case it is delayed...).

I don't remember if Vanguard has anything like this delay (or possible delay) when selling outside mutual funds.
Is that a possibility if you sold it near the end of the day/4pm?

Or was there any transaction fee? Were they Vanguard funds at Vanguard, or from some other firm such as Fidelity or Schwab, etc.? (In that case, I'm not sure why the 89 cents, however.)

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FiveK
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Re: Help with RMD please

Post by FiveK »

retiredjg wrote: Sat Sep 24, 2022 12:03 pm A couple of weeks ago, I took my full RMD from my rollover IRA. Some went to a taxable brokerage account. Some went to my credit union. It all seemed fine.

...the RMD is between me and the IRS....

Today, I signed on to do a Roth conversion. It told me I still had $49.89 to take on my RMD. I don't understand how that happened because I took the exact RMD in dollars.
That "the RMD is between me and the IRS" is spot on, so it becomes a matter of "could you prove you took the RMD if the IRS ever asks?"

To that end,
- how do the separate dollar amounts to the brokerage and credit union compare with what you requested for each?
- how does the total amount that actually left the IRA compare with your RMD?
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Re: Help with RMD please

Post by Lynette »

Does Vanguard allow you to sell fractional shares? Did you compute the exact number of shares that would be sold for the dollar amount required? I always sell my shares first so that it goes into the IRA sweep fund. Then a few days later once it has cleared, I take the RMD from there. I always take a few extra dollars just in case.
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Re: Help with RMD please

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Researchmed, I sold two Vanguard mutual funds. Total Stock Index and Total Bond index. I think I did the request at about 2:00 in the afternoon. The total of the two sales should have added up to my RMD. But something less than that was taken out of my IRA.

No commissions. No fees. It just didn't add up to what it was supposed to. I don't understand why.

On the old mutual fund account, if I told it to sell a certain dollar amount, that is what happened. Didn't matter what time of day or day of week the request was made. The right amount got taken out of my IRA.
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Re: Help with RMD please

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FiveK wrote: Sat Sep 24, 2022 4:02 pm
retiredjg wrote: Sat Sep 24, 2022 12:03 pm A couple of weeks ago, I took my full RMD from my rollover IRA. Some went to a taxable brokerage account. Some went to my credit union. It all seemed fine.

...the RMD is between me and the IRS....

Today, I signed on to do a Roth conversion. It told me I still had $49.89 to take on my RMD. I don't understand how that happened because I took the exact RMD in dollars.
That "the RMD is between me and the IRS" is spot on, so it becomes a matter of "could you prove you took the RMD if the IRS ever asks?"

To that end,
- how do the separate dollar amounts to the brokerage and credit union compare with what you requested for each?
- how does the total amount that actually left the IRA compare with your RMD?
Yes, I could show what the RMD was supposed to be. And I could show that I sold one fund and sent the proceeds to the taxable account with some withheld for taxes. And I could show that I sold a different fund and the proceeds went to the credit union with some withheld for taxes.

The problem is, they didn't sell enough to cover the entire RMD. It was short.
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Re: Help with RMD please

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Lynette wrote: Sat Sep 24, 2022 4:10 pm Does Vanguard allow you to sell fractional shares? Did you compute the exact number of shares that would be sold for the dollar amount required? I always sell my shares first so that it goes into the IRA sweep fund. Then a few days later once it has cleared, I take the RMD from there. I always take a few extra dollars just in case.
No. It asked for how many dollars to sell. It did not ask me to compute the number of shares and I did not specify numbers of shares. I specified a dollar amount.
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Re: Help with RMD please

Post by delamer »

So you are saying (example), that you sold $5,000 of one fund and $5,000 from another fund. And each sale went to a different account. But one account only got $4,950?

So your RMD was $10,000, but only $9,950 was sold?
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Re: Help with RMD please

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retiredjg wrote: Sat Sep 24, 2022 4:17 pm ... Yes, I could show what the RMD was supposed to be. And I could show that I sold one fund and sent the proceeds to the taxable account with some withheld for taxes. And I could show that I sold a different fund and the proceeds went to the credit union with some withheld for taxes.

The problem is, they didn't sell enough to cover the entire RMD. It was short.
Was the withholding amount what you expected?

ETA: Did you happen to capture or write down the Vanguard transaction confirmation number? If so, you could call them and let them sort it out. My guess is that they would somehow make it right. Having the transaction confirmation number is very helpful for them to isolate your particular transaction.

Regards,
Last edited by retired@50 on Sat Sep 24, 2022 4:33 pm, edited 1 time in total.
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Re: Help with RMD please

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retiredjg wrote: Sat Sep 24, 2022 2:39 pm I made the request during the day. I assumed the number of shares would be based on the price at the end of that day. But none of that addresses the question.

I did not sell a certain number of shares. I sold a certain number of dollars. And it didn't happen. Why not?
Asking Vanguard might be the best approach.

Not that it necessarily matters for answering the question, but one would think that Vanguard's (or any brokerage's) software could translate a dollar request into a mutual fund share request - unless the closing price for the day depends on the overall buy/sell requests based on number of shares.

Do the numbers of shares sold for the two funds match your dollar requests divided by the closing price for the previous day?
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Re: Help with RMD please

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delamer wrote: Sat Sep 24, 2022 4:25 pm So you are saying (example), that you sold $5,000 of one fund and $5,000 from another fund. And each sale went to a different account. But one account only got $4,950?

?
Sort of. I didn't write down the actual two amounts I told the website to sell. It was not equal amounts but it did add up to what it said the RMD was.

But the example you gave....So your RMD was $10,000, but only $9,950 was sold....is correct.


Here are the possibilities I can think of.

1. I made a mistake. Not impossible. I won't rule it out. But I'm somewhat sure that is not what happened and the numbers are just too wonky. What logical way could I tell it to sell $49.89 less than it should have been?

2. The IRA web page told me that my RMD was a certain amount and that is what I sold. But what if that certain amount was wrong?
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Re: Help with RMD please

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retired@50 wrote: Sat Sep 24, 2022 4:27 pm
retiredjg wrote: Sat Sep 24, 2022 4:17 pm ... Yes, I could show what the RMD was supposed to be. And I could show that I sold one fund and sent the proceeds to the taxable account with some withheld for taxes. And I could show that I sold a different fund and the proceeds went to the credit union with some withheld for taxes.

The problem is, they didn't sell enough to cover the entire RMD. It was short.
Was the withholding amount what you expected?
I don't know. This always went so smoothly on the mutual fund platform that it did not occur to me to write any of the numbers down. It all looked right at the time.


ETA: Did you happen to capture or write down the Vanguard transaction confirmation number? If so, you could call them and let them sort it out. My guess is that they would somehow make it right. Having the transaction confirmation number is very helpful for them to isolate your particular transaction.

Regards,
Again, didn't occur to me because what I was shown after I clicked on "transact" looked right and I figured I could always look up the transaction later if needed. It turns out this is more difficult than I expected.

I won't be calling them for this. It's not worth it. I just did another withdrawal for the missing $49.89 to complete the RMD and will not worry about it.

Mostly, I just want to know if every transaction I do on this brokerage platform will be an estimate rather than a real number. On the old platform, they always sold exactly what I told them to sell. If it is going to be different on this platform, I want to know it so I can be sure to go back and check a few days later.

For example....I did a Roth conversion today and you can be sure I wrote down the exact number of shares I told them to sell and the estimated dollars. But this is a different kind of transaction, so I don't know if I'll learn anything from that or not. :happy
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Re: Help with RMD please

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FiveK wrote: Sat Sep 24, 2022 4:32 pm
retiredjg wrote: Sat Sep 24, 2022 2:39 pm I made the request during the day. I assumed the number of shares would be based on the price at the end of that day. But none of that addresses the question.

I did not sell a certain number of shares. I sold a certain number of dollars. And it didn't happen. Why not?
Asking Vanguard might be the best approach.

Not that it necessarily matters for answering the question, but one would think that Vanguard's (or any brokerage's) software could translate a dollar request into a mutual fund share request - unless the closing price for the day depends on the overall buy/sell requests based on number of shares.

Do the numbers of shares sold for the two funds match your dollar requests divided by the closing price for the previous day?
I have no idea. I didn't write down the numbers. Never needed to before. In the past (on the mutual fund platform) if I told VG to sell $1,000, they sold $1,000. Exactly.
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Re: Help with RMD please

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retiredjg wrote: Sat Sep 24, 2022 4:36 pm 2. The IRA web page told me that my RMD was a certain amount and that is what I sold. But what if that certain amount was wrong?
I always calculate my RMD myself. Then I check it to see if Vanguard calculates the same number as I do. I have not found any mistakes in their calculation. It's an easy calculation.
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Re: Help with RMD please

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retiredjg wrote: Sat Sep 24, 2022 4:47 pm It all looked right at the time.

Well, at least this is a relatively easy way to learn to make copies.
It's easy to make a screen save or pdf of the completed transaction, and then a) you know if you did it right, and b) you have proof if you did and <they> screwed it up.

You can later trash the pdf or keep them indefinitely. :wink:

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Re: Help with RMD please

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retiredjg wrote: Sat Sep 24, 2022 4:47 pm
retired@50 wrote: Sat Sep 24, 2022 4:27 pm
retiredjg wrote: Sat Sep 24, 2022 4:17 pm ... Yes, I could show what the RMD was supposed to be. And I could show that I sold one fund and sent the proceeds to the taxable account with some withheld for taxes. And I could show that I sold a different fund and the proceeds went to the credit union with some withheld for taxes.

The problem is, they didn't sell enough to cover the entire RMD. It was short.
Was the withholding amount what you expected?
I don't know. This always went so smoothly on the mutual fund platform that it did not occur to me to write any of the numbers down. It all looked right at the time.


ETA: Did you happen to capture or write down the Vanguard transaction confirmation number? If so, you could call them and let them sort it out. My guess is that they would somehow make it right. Having the transaction confirmation number is very helpful for them to isolate your particular transaction.

Regards,
Again, didn't occur to me because what I was shown after I clicked on "transact" looked right and I figured I could always look up the transaction later if needed. It turns out this is more difficult than I expected.

I won't be calling them for this. It's not worth it. I just did another withdrawal for the missing $49.89 to complete the RMD and will not worry about it.

Mostly, I just want to know if every transaction I do on this brokerage platform will be an estimate rather than a real number. On the old platform, they always sold exactly what I told them to sell. If it is going to be different on this platform, I want to know it so I can be sure to go back and check a few days later.

For example....I did a Roth conversion today and you can be sure I wrote down the exact number of shares I told them to sell and the estimated dollars. But this is a different kind of transaction, so I don't know if I'll learn anything from that or not. :happy
My experience has been different than yours. I've never had a transaction that was off.

Once upon a time (while on the mutual fund platform), I did have some transactions that didn't go through as quickly as I expected (took more than the standard day or two), so, I got on the telephone with them to get it sorted out. In the end, it took a couple of weeks but they did finally make everything right, just as I was hoping for on transaction day. The lesson I gained from that encounter was that you should always capture the transaction confirmation number, and hold on to it until the transaction has settled and you've reviewed the confirmation PDF. If you ever need to call them, having the transaction confirmation number is helpful.

Regards,
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Re: Help with RMD please

Post by retiredjg »

Bumping for the Sunday crowd. Thanks to all who have commented. :happy

If nobody else reports something like this, I'm just going to have to assume I made a mistake and put in the wrong numbers. Vanguard's confirmations show what they did - which is different from what I thought I had asked for.
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Re: Help with RMD please

Post by retiredjg »

I've have stumbled on the answer. I'm surprised I didn't think of this before.

In summary, I sold from two different funds in IRA to take my entire RMD at one time. A few weeks later, I learned there was still some RMD left that had to be taken ($49.89). I didn't know why because I had told VG to withdraw a certain number of dollars, not a certain number of shares.

What I had completely forgotten :oops:...was that I closed out (sold all the shares of) one of the fund accounts when I took my RMD.

Since the transaction happened at end of day price, VG sold everything....but "everything" was $49.89 less than what it was earlier in the day when I placed the order. Therefore, the RMD was $49.89 short.

Several of you were on the right track, but it made no sense until I realized I had sold all shares for that one fund rather than selling a certain number of dollars.

Thanks for your help!
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Re: Help with RMD please

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retiredjg wrote: Mon Sep 26, 2022 12:19 pm I've have stumbled on the answer. I'm surprised I didn't think of this before.

In summary, I sold from two different funds in IRA to take my entire RMD at one time. A few weeks later, I learned there was still some RMD left that had to be taken ($49.89). I didn't know why because I had told VG to withdraw a certain number of dollars, not a certain number of shares.

What I had completely forgotten :oops:...was that I closed out (sold all the shares of) one of the fund accounts when I took my RMD.

Since the transaction happened at end of day price, VG sold everything....but "everything" was $49.89 less than what it was earlier in the day when I placed the order. Therefore, the RMD was $49.89 short.

Several of you were on the right track, but it made no sense until I realized I had sold all shares for that one fund rather than selling a certain number of dollars.

Thanks for your help!
Good to know the conclusion. Satisfies my curiosity at least. I suppose if the NAV of the closed out fund had moved up, instead of down, you'd have been wondering why you took too much, instead of too little to satisfy the RMD.

Regards,
Last edited by retired@50 on Mon Sep 26, 2022 1:30 pm, edited 1 time in total.
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Re: Help with RMD please

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retiredjg wrote: Mon Sep 26, 2022 12:19 pm I've have stumbled on the answer. I'm surprised I didn't think of this before.

In summary, I sold from two different funds in IRA to take my entire RMD at one time. A few weeks later, I learned there was still some RMD left that had to be taken ($49.89). I didn't know why because I had told VG to withdraw a certain number of dollars, not a certain number of shares.

What I had completely forgotten :oops:...was that I closed out (sold all the shares of) one of the fund accounts when I took my RMD.

Since the transaction happened at end of day price, VG sold everything....but "everything" was $49.89 less than what it was earlier in the day when I placed the order. Therefore, the RMD was $49.89 short.

Several of you were on the right track, but it made no sense until I realized I had sold all shares for that one fund rather than selling a certain number of dollars.

Thanks for your help!
Very interesting and thanks for the update. It sounds similar to the process Vanguard uses for Roth conversions. For conversions, at least for those done over the phone while the market is open, if you convert a fixed dollar amount the conversion is done using the previous day's closing price. The actual amount converted may differ by a few pennies due to rounding the number of shares to 3 decimal places. If you convert a specified number of shares, or you convert all of your remaining shares of a fund, then the conversion uses the current day's closing price and you won't know the exact dollar amount of the conversion until it is done, sometime after the market closes.

It would be helpful to know if the other fund you sold (where you didn't sell all your shares) used the prior trading day's closing price.
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Re: Help with RMD please

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Chip Munk wrote: Mon Sep 26, 2022 1:27 pm
It would be helpful to know if the other fund you sold (where you didn't sell all your shares) used the prior trading day's closing price.
Apparently not. The prior day's closing price for the other fund was $10.030 and, according to the confirmation, it actually sold at $10.05 which was the price for both the trading date and the transaction date.

For the fund that seems to have come up "short", the price I was looking at when I placed the order when down 15 cents a share before it was sold. Multiplying that by the number of shares is very close to my "shortage" - off about 70 cents. I suspect that is because the number of shares is rounded to 3 decimal places, but I don't know for sure.. This accounts for what I thought was a shortage, down to the penny.
Last edited by retiredjg on Mon Sep 26, 2022 3:09 pm, edited 1 time in total.
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Re: Help with RMD please

Post by Chip Munk »

retiredjg wrote: Mon Sep 26, 2022 2:33 pm
Chip Munk wrote: Mon Sep 26, 2022 1:27 pm
It would be helpful to know if the other fund you sold (where you didn't sell all your shares) used the prior trading day's closing price.
Apparently not. The prior day's closing price for the other fund was $10.030 and, according to the confirmation, it actually sold at $10.05 which was the price for both the trading date and the transaction date.

For the fund that seems to have come up "short", the price I was looking at when I placed the order when down 15 cents a share before it was sold. Multiplying that by the number of shares is very close to my "shortage" - off about 70 cents. I suspect that is because the number of shares is rounded to 3 decimal places, but I don't know for sure.
For the fund that sold at $10.05, did they reduce the number of shares to hit your requested dollar amount or was the final dollar amount higher than what you requested?

My DH will need to start taking RMDs in a couple of years so this discussion is very helpful.
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Re: Help with RMD please

Post by celia »

I’m glad you figured out why the dollar amount was different than what you requested.
FiveK wrote: Sat Sep 24, 2022 4:02 pm
retiredjg wrote: Sat Sep 24, 2022 12:03 pm
...the RMD is between me and the IRS....
That "the RMD is between me and the IRS" is spot on, so it becomes a matter of "could you prove you took the RMD if the IRS ever asks?"
This part is not accurate. The custodian is VERY RELEVANT since their RMD calculation is the official calculation that the IRS accepts. Anytime you get a different calculation than the custodian, you need to figure out why (or just withdraw the larger amount).

This is evidenced in the year-end reporting all custodians have with the IRS. One of the many things they report is the year-end value of every IRA and the amount that was withdrawn from the IRA and what the RMD was. This is reported for every IRA, no matter the account owner’s age or if there were transactions in the account or not. Even long-ago forgotten IRAs should be reported.

The IRS can then see all your IRAs from all custodians and what your total expected RMDs would be and what you actually took out. All of this is done electronically and automatically and there is nowhere in the process for the account owner to share what THEY think the RMD is. So, if the custodian-calculated amount is wrong, you need to work it out with the custodian before the year ends.

One of the few items that is truly between you and the IRS is if your IRA contributions were deducted or not. Maybe that is what you were thinking about.
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Re: Help with RMD please

Post by FiveK »

celia wrote: Mon Sep 26, 2022 3:36 pmThe custodian is VERY RELEVANT since their RMD calculation is the official calculation that the IRS accepts.
According to one IRS web page, Although the IRA custodian or retirement plan administrator may calculate the RMD, the IRA or retirement plan account owner is ultimately responsible for calculating the amount of the RMD.

Is there another IRS web site (or publication, etc.) that says otherwise?
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Re: Help with RMD please

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celia wrote: Mon Sep 26, 2022 3:36 pm One of the few items that is truly between you and the IRS is if your IRA contributions were deducted or not. Maybe that is what you were thinking about.
That is what I was talking about.

I was not happy that the website did not report any RMD taken for several days. I expected it to be overnight - when the transaction occurred - or at most 1 day after the transaction. But I decided not to worry about it because whether I take the RMD is between the IRS and me.
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Re: Help with RMD please

Post by Alan S. »

retiredjg wrote: Mon Sep 26, 2022 4:23 pm
celia wrote: Mon Sep 26, 2022 3:36 pm One of the few items that is truly between you and the IRS is if your IRA contributions were deducted or not. Maybe that is what you were thinking about.
That is what I was talking about.

I was not happy that the website did not report any RMD taken for several days. I expected it to be overnight - when the transaction occurred - or at most 1 day after the transaction. But I decided not to worry about it because whether I take the RMD is between the IRS and me.
It is abnormal for any distribution from an IRA not to show up in your on line transaction record within a day or two. The amount that shows should be reflected in Box 1 of the 1099R, along with any other distributions from that same account in the calendar year. There is no difference in how distributions are handled which are RMDs from those that are not.

The following year the IRS should compare the total RMD for all such accounts with the total of the 1099R forms, but it seems like whatever system they have for doing this is either inadequate or inactive. As such, the IRS has largely punted RMD enforcement to IRA custodians who are handicapped because the only data they have is for their own accounts, while RMD aggregation rules apply.

Taking an RMD in kind or selling concurrently with the distribution is prone to minor shortages or overages.
1) For an overage that is small, it can usually be ignored, or you could also convert it to a Roth IRA if you do not want to use up the one permitted rollover back to the distributing TIRA for a minor amount.
2) For a shortfall, a secondary distribution to bring the RMD up to the full amount is required, probably in cash if you want to be sure to hit the exact RMD. Holding some cash in a bear market is not a bad idea, and so far in 2022 cash has outperformed most everything except perhaps CDs.

I wonder how VG handles these transactions for those who use their RMD service and are fully invested. They would not want to have to deal with small discrepancies like this.
Lionel Hutz
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Re: Help with RMD please

Post by Lionel Hutz »

OP you indicate you sold in dollars on a certain date, which seems sensible.

Did you confirm this dollar amount appears in the transaction history or on a confirmation statement?

I don't know yet where things went wrong, but to me it seems unlikely you intended to sell x, actually sold x, but vanguard is saying you sold x-y.
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retiredjg
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Re: Help with RMD please

Post by retiredjg »

Alan S. wrote: Mon Sep 26, 2022 6:13 pm
retiredjg wrote: Mon Sep 26, 2022 4:23 pm
celia wrote: Mon Sep 26, 2022 3:36 pm One of the few items that is truly between you and the IRS is if your IRA contributions were deducted or not. Maybe that is what you were thinking about.
That is what I was talking about.

I was not happy that the website did not report any RMD taken for several days. I expected it to be overnight - when the transaction occurred - or at most 1 day after the transaction. But I decided not to worry about it because whether I take the RMD is between the IRS and me.
It is abnormal for any distribution from an IRA not to show up in your on line transaction record within a day or two.
The distributions did show up as transactions within a day or two.

However, when I clicked on the IRA account to do another transaction, a warning box continued to say that I had to take the entire amount of my RMD out of my IRA before the end of the year. That is what lasted several days longer than what I would have expected. I figured that notice would change when the transactions occurred or at least within 24 hours. But it was at least several days longer than that.

It was very similar to the request to transition to the brokerage account - that request stayed on my account for many days after I actually did the transition. It kept asking me to transition for days (maybe weeks) after I had done it!

It's sort of like the left hand not knowing what the right hand is doing.

In fact, it is exactly like that. :(
Last edited by retiredjg on Tue Sep 27, 2022 10:27 am, edited 1 time in total.
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retiredjg
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Re: Help with RMD please

Post by retiredjg »

Chip Munk wrote: Mon Sep 26, 2022 2:49 pm
retiredjg wrote: Mon Sep 26, 2022 2:33 pm
Chip Munk wrote: Mon Sep 26, 2022 1:27 pm
It would be helpful to know if the other fund you sold (where you didn't sell all your shares) used the prior trading day's closing price.
Apparently not. The prior day's closing price for the other fund was $10.030 and, according to the confirmation, it actually sold at $10.05 which was the price for both the trading date and the transaction date.

For the fund that seems to have come up "short", the price I was looking at when I placed the order when down 15 cents a share before it was sold. Multiplying that by the number of shares is very close to my "shortage" - off about 70 cents. I suspect that is because the number of shares is rounded to 3 decimal places, but I don't know for sure.
For the fund that sold at $10.05, did they reduce the number of shares to hit your requested dollar amount or was the final dollar amount higher than what you requested?

My DH will need to start taking RMDs in a couple of years so this discussion is very helpful.
Chip Munk, the fund (the one that sold at $10.05) did sell exactly what I asked for.

And the second RMD that I took yesterday (to make up for the shortage I had caused) apparently is also selling the exact dollar amount that I asked for...according to the confirmation that has appeared today. For some reason, the settlement date on this is not till tomorrow, but I have no reason to believe it will be different from what the confirmation shows.

The bottom line is...for RMDs it will apparently sell exactly what you ask for....unless you are selling all the shares in a fund. Then it will sell what it has at the end of the day (after you put in your order if you did the order earlier in the day).

Roth conversions are handled differently. For Roth conversions from a mutual fund (not settlement fund), you tell it the number of shares to convert and you only know approximately how many dollars that will be.
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Re: Help with RMD please

Post by retired@50 »

retiredjg wrote: Tue Sep 27, 2022 10:16 am
Roth conversions are handled differently. For Roth conversions from a mutual fund (not settlement fund), you tell it the number of shares to convert and you only know approximately how many dollars that will be.
If dollar level precision is necessary for some reason...

If you want to work-around the share transfer when doing Roth conversions, you can put a specific dollar amount in the Trad. settlement fund. Dollars in the settlement fund will move from Trad. -> Roth as dollars, or shares, since they are the same thing, it doesn't matter. Once the money is moved to the Roth settlement fund, then you can invest as needed.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
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Chip Munk
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Re: Help with RMD please

Post by Chip Munk »

retired@50 wrote: Tue Sep 27, 2022 11:27 am
retiredjg wrote: Tue Sep 27, 2022 10:16 am
Roth conversions are handled differently. For Roth conversions from a mutual fund (not settlement fund), you tell it the number of shares to convert and you only know approximately how many dollars that will be.
If dollar level precision is necessary for some reason...

If you want to work-around the share transfer when doing Roth conversions, you can put a specific dollar amount in the Trad. settlement fund. Dollars in the settlement fund will move from Trad. -> Roth as dollars, or shares, since they are the same thing, it doesn't matter. Once the money is moved to the Roth settlement fund, then you can invest as needed.

Regards,
Another option if you want to do a conversion in kind for a specified dollar amount, is to do it over the phone while the market is open. You tell the CSR the dollar amount and they will calculate the number of shares out to 3 decimal places using the prior trading day's closing price. The final amount might have to be adjusted by a few pennies from what you requested due to rounding the number of shares to 3 decimal places. When I'm ready to do a conversion, if the market was down the previous day but is trending up the current day, I convert by dollar amount so that I can take advantage of what I hope ends up being the lower price per share. No guarantees since the market can reverse course late in the trading day.
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