How to take an RMD
Terry, when it comes time for the RMD distributions; can you simply have the distributions automatically transferred to a checking or savings account as long as they are both in the same bank? Does that qualify? What other methods are acceptable? Seems like an easy question but I haven’t been able to get a straight answer on this.
Thank you
Terry Says
OK, lots of people are starting to think about RMDs, so I think I’ll write a column (thanks for the idea!). But here is the most important point. I’m assuming that you might have IRAs at more than one custodian. So pick one custodian, tell them the total amount you had invested in your IRA at year-end the previous year (keep all those statements, very important). Then ask them to calculate the RMD based on ALL the accounts. They will give you a number. You can take that out of one — or more than one account — as long as you take the total they calculate. Just ask your IRA custodian to send you a check — or absolutely, you can have them deposit it in a money market account at your bank. I recommend asking them to WITHHOLD INCOME TAXES from the amount you receive. You don’t want to fall behind during the year.
