Will I have to take a RMD in this situation?

Home Fairmark Forum Retirement Savings and Benefits Will I have to take a RMD in this situation?

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  • #8267
    Jannie
    Participant

    I understand due to the virus situation there was a change in having to do the RMD. My situation is it’s a retirement plan – I am required (normally to do a RMD, but forbidden from doing a QCD). So near the end of the yr I normally ask how much the RMD is and they send the ck. Will the change in the law (this yr) allow me to skip this.

    #8268
    Alan S.
    Participant

    Your 2020 RMD has been waived. You can still do a QCD, so your info is incorrect in that respect. Of course, you must have reached 70.5 to do a QCD, but it will not have the same tax impact because there is no RMD to offset. You will save more if you delay the QCD until January and perhaps double up in 2021 when RMDs resume. Those 2021 QCDs will reduce taxable income from the 2021 RMD. If you do a QCD this year, while the distribution will not be taxed, it will not change your taxable income for 2020 but it will reduce future RMDs by a small amount and save you tax dollars in future years, but not in 2020.

    Instead, if you delay your QCD(s) until 2021, you will offset the increase in taxable income in 2021 due to resumption of RMDs.

    #8272
    Jannie
    Participant

    Maybe I should clarify – I was told by TIAA that I can’t take my RMD as a QCD in this account. When I was notified I had to do RMD’s I asked & they said I couldn’t do a QCD. I Have Not set this account to have an amount taken out every month or routinely. I call tell them to send a ck for the RMD. In March I called (was finally going to have something done so I wouldn’t have to call every yr). At that time since (one of the accts require a spousal waiver, the person said I may want to wait as there was something in the works at Fed. level. I’m “guessing” since I hadn’t set this up to be drawn out routinely is why I might not have to take this out. I’d prefer not to.
    Thanks

    #8273
    Alan S.
    Participant

    Are you sure this account is an IRA? QCDs can only be done from an IRA, not from any employer plans, so perhaps that is why they indicated a QCD could not be done.

    And for IRAs you cannot set up automatic QCDs with most firms. You have to request them individually, or have an IRA with check writing where you can write your own QCD checks.

    #8274
    Jannie
    Participant

    I’ll call them direct to clarify what they said back in March. As, I was given to understand this yr. only I wouldn’t have do take a RMD. However, in looking at what the law said I may have to with this account.

    #8288
    Alan S.
    Participant

    If the plan requires you to take a distribution, it is not an RMD according to IRS rules. As such, you could roll it over to an IRA within 60 days of receipt.

    #8289
    Jannie
    Participant

    Thank you

    #10251
    Jannie
    Participant

    Update: Called the company direct & they said I didn’t have to take the RMD this year – I made sure they understood for what account and had another another person listen on the line – Not that I don’t trust, but had an an issue with them the 1st yr I had to take a RMD. So being cautious. At least that’s one less thing to worry about this year 🙂

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