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Alert for Vanguard investors who have a Automatic RMD Withdrawal set up for 2025

hondo
edited January 13 in Fund Discussions
If you have a Automatic RMD Withdrawal set up at VG, it may be wish to check that it is still there.

I have had an Automatic RMD Withdrawal set up at VG for many years. Everything has always worked fine.

This year, I received a letter from VG dated 1/3/25. It was the RMD withdrawal confirmation summary for 2025, and everything was correct. I was set up for 2025.

Then today, I received another letter from VG dated 1/8/25, with another RMD confirmation summary for 2025. This one showed "2025 Service Level -- Calculation Only" and "Distribution Option -- None". My Scheduled Automatic RMD Distribution had been removed.

I telephoned VG and spoke with a lady who was very helpful. She restored my scheduled RMD and everything is fine again. I just want to alert others that could have happened to them and to check their confirmation.

Comments

  • msf
    Regardless of your institution you should check the RMD setup at the beginning of each year. One year Fidelity set my automatic withdrawal (on an inherited IRA) at roughly 4x the correct amount. Even the best:-) aren't perfect.
  • Old_JoeOld_Joe
    I'm gonna have to check with BS1000 on that...
  • yogibearbullyogibearbull
    edited January 14
    Firms have different screens for RMDs and regular withdrawals. There are more options available for regular withdrawals.

    So, I just subscribe to firms' RMD calculation services, if available, but don't rely on them for any distributions. I just use them to double check my calculations.

    I calculate my own RMDs - using previous yearend balances and the IRS factor.

    I take the amounts as regular withdrawals. This works because the first withdrawals from RMD-eligible accounts are considered RMDs.

    Last year, I had no problem specifying the % tax withheld. I don't know about this year - I now take RMDs mid/late year. I used to take them on Jan 2 or 3, but after the fiasco in 2020 (that probably would never repeat), I do it differently now.

    This has also allowed me at times to follow the RMD consolidation rules for T-IRAs, and separately for 403b (but those aren't not applicable for 401k).
  • AnnaAnna
    edited January 14
    I like the way the TSP does it. It computes it and simply has a policy that, when they check in December, if you have not withdrawn or scheduled to withdraw the total amount by the end of the year, they will automatically withdraw the remaining amount for the RMD that year, at a predetermined time. My predetermined time seems to be around December 20. Since I expect the withdrawal on or around the 20th of December, if I were not to receive a notice or direct deposit, I would know I needed to find out why and make sure it got done. I did not set this up, they just do this EOY check and take care of meeting the deadline.

    Meanwhile, thanks for the Vanguard warning. I, too, need to check and verify.
  • hank
    edited January 14
    Or you could just calculate the amount yourself on one of the dozens of free calculators available online and then make a note on your calendar for the day you intend to pull it.

    Or say, “Hey Siri: Remind me to …..”

    If you’re able to manage your multi-million dollar diversified investment portfolio on your own, remembering to pull the RMD shouldn’t be that challenging! :)
  • beebee
    I thought I'd share a few articles on RMD Withdrawal strategies:

    the-best-way-to-take-required-minimum-distributions-rmds

    8-strategies-for-optimizing-rmds-from-iras
  • MarkMark
    I'm sure glad that I don't have to concern myself with RMD's
  • hondo
    hank said:

    Or you could just calculate the amount yourself on one of the dozens of free calculators available online and then make a note on your calendar for the day you intend to pull it.

    Or say, “Hey Siri: Remind me to …..”

    If you’re able to manage your multi-million dollar diversified investment portfolio on your own, remembering to pull the RMD shouldn’t be that challenging! :)

  • hondo
    hondo said:

    hank said:

    Or you could just calculate the amount yourself on one of the dozens of free calculators available online and then make a note on your calendar for the day you intend to pull it.

    Or say, “Hey Siri: Remind me to …..”

    If you’re able to manage your multi-million dollar diversified investment portfolio on your own, remembering to pull the RMD shouldn’t be that challenging! :)

    Hello hank,
    I do calculate my RMD myself each year. You are correct, it is not a very challenging process. I have always had it set up with VG to also calculate it and to withdraw it on a set date. I do this so that just in case it would slip my mind or if something were to happen to me it would be done on time and my wife would not have to deal with it.

    The point to the OP is that the RMD was correctly set up for 2025, and then a few days later was deleted for some unknown reason. If I had not paid attention to the second letter, I could have had a big problem at the end of this year, since the withdrawal was scheduled for late December. The correction was done with a simple phone call. I only wanted to alert other investors that this could possibly happen to anyone and suggest they check their scheduled RMDsl.
  • hank
    edited January 15
    @hondo - Thanks for the feedback. My humorous comment was not intended to criticize the post. Probably a good idea to re-check all your auto settings at VG. Excellent post. I’m a bit OCD and so always check, check, check & re-check those sorts of things even if set to “auto”. Not everyone is so inclined. (Thankfully).

    Thanks for the OP.
    Old_Joe said:

    I'm gonna have to check with BS1000 on that...

    Stop it! OJ :)
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