RMD
What does RMD stand for?
Required Minimum Distribution
Client is looking to move money from their Traditional IRA to their Roth IRA
Transfer. This is a Roth Conversion and should be transferred to Retirement Complex
What is the deadline for a client to make an previous year contribution to their IRA by ACH?
Contributions to which type of IRA are pre-tax (deductible) and contributions to which type of IRA are post-tax?
Traditional/Rollover IRAs are pre-tax contributions that can be tax deductible while contributions to Roth IRAs are post-tax
What information does the 1099R form report, and when is that made available to clients?
The 1099R form reports money leaving retirement accounts, such as distributions and rollovers. This form is made available to clients around the middle of January
How is an RMD Calculated?
Year end balance of Traditional or Rollover IRA divided by the life expectancy factor
A client is attempting to take a distribution from their VBA Rollover IRA online and they need someone to help walk them through it
Contain. You can walk clients through the online trade path to help them self provision any distributions online. If they need you to do the distribution for them, transfer it to a licensed retirement representative
What is the deadline for a client to take out their RMD when it is not there first year taking an RMD?
By December 31st of the same year
What methods can clients use to distribute from their IRA? (4 answers)
They can distribute by ACH, Check, Wire or Exchange to a Vanguard Non-Retirement Account
If a client contributes to their IRA for the current year, what Tax Form would be generated and when would that be available to the client?
The 5498 Form will be generated and made available to the client by the end of May of the following year
In an RMD service, what distribution type can Vanguard crew elect for a client but clients themselves cannot choose?
Automatic RMD Service by Check
Transfer. Setting up automatic RMD Services in VBA should be handled by a licensed retirement representative
What timeline do we quote to clients for distribution by check via first class mail AND the timeline for distribution by FedEx priority mail? BE SPECIFIC
First class mail: 7-10 Business Days
FedEx mail: 2-3 Business Days
What path can you give the client to contribute or distribute from their VBA IRA?
Holdings -> Transfer Money -> Contribute/Withdraw from IRA
OR
Transact -> Buy and Sell -> Transfer Money -> Contribute/Withdrawal from IRA
Will the 1099R from Vanguard show a Qualified Charitable Distribution as such?
No. It will be coded as a normal distribution. The responsibility is on the client to file it properly with the IRS
What specific beneficiary information can effect the RMD calculation of a client?
If the beneficiary is a spouse who is more than 10 years younger than the client
A client calls in and says they recently rolled over their 401k to a VG IRA but didn't take their RMD before rolling over
Transfer. This type of call should be handled by Retirement Complex.
What is the deadline for a client to take out their first RMD
By April 1st of the following year
What two criteria need to be met for a distribution from a Roth IRA to be considered "qualified" making the distributions completely tax free?
Client must have had the Roth IRA established longer than 5 years from the first contribution and must be over the age of 59 1/2
A client (32 years old) calls in and tells us that the distribution they took out of their Traditional IRA qualified for an exception, but the 1099R still codes the distribution as an early distribution. They want you to change their form. What do you tell this client?
At Vanguard, we don't verify that your distributions qualify for an exception or not. Regardless, if you are under age 59 1/2, we have to report it as an early distribution and its up to you and your Tax Pro to file it properly to qualify yourself for an exception
What IRS publication contains the Life Expectancy Factor tables?
Publication 509-B
A client calls in to take a distribution from a VBA settlement fund. You notice they already have an RMD service set up
Transfer. No distributions can be made when an RMD service is already set up. Transfer to a licensed retirement representative
What is the date called when someone turns the age when they have to start taking RMDs?
Required Beginning Date (RBD)
Amber calls in and asks what the contribution limit is for someone her age in 2024. She is currently 49 years old but her birthday is in November 2024. What do you tell her?
$8,000. Since she is turning 50 this year, she qualifies for the catch up contribution of an additional $1,000.
What will be the distribution code for a client that has taken their RMD and nothing else for the tax year?
Normal Distribution. 07