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IT’S THAT TIME OF the year. We seasoned citizens must take our required minimum distributions (RMDs) from our retirement accounts, like it or not, needed or not. Uncle Sam forces us to take these taxable withdrawals, so he can get his share.
It’s a fairly simple process to figure out how much needs to be withdrawn. Determine the total value of your qualified retirement accounts, such as your 401(k) and traditional IRA, as of the previous Dec. 31. Get your hands on the right IRS chart. Look up the required percentage to be distributed based on your age. And there you have it.
Now comes the tricky part: Getting your recordkeeper to act.
I have to deal with three different recordkeepers—one for my 401(k) plan and two for my IRAs. I’ve been meaning to consolidate, but you know how that goes.
The recordkeeper for my 401(k) does a great job, so I’ll tell you who it is: Fidelity Investments. I go online and my RMD amount is listed there, right after the first of the year. I select a distribution, enter the amount of tax I want withheld, and the next day or so the money is transferred to my designated bank account. All done.
Recordkeeper No. 2 adds more administration, so I’ll skip the name. Here I must speak with a representative, who can tell me the RMD, which is not available online. But they can’t handle the transaction. Instead, they must send me a form via fax, e-mail or snail mail; I get to choose. I elect email, receive the form, complete all the sections, scan it and send it back via email. They couldn’t open the file on the first attempt. The second try was a success and the distribution was transferred to my brokerage account.
Now we get to No. 3, “the winner,” he said sarcastically. Here I must call my “advisor,” a person I have never met. We talk on the phone and he gathers all my information. He then initiates a call with a processor, who asks the same questions just to confirm my request. I will receive a check in three business days, which is about as long as I was on the phone.
What gives? This is the 21st century. We do everything else online for ourselves, don’t we?
Richard Quinn blogs at QuinnsCommentary.com. Before retiring in 2010, Dick was a compensation and benefits executive. His previous articles include We’re Stuffed, Clueless, Hard Earned and Time to Choose. Follow Dick on Twitter @QuinnsComments.
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This is what gives:
“I’ve been meaning to consolidate, but you know how that goes.”