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RMD Info Needed For Newbie

aaflygirl
  |     |   87 posts since 2016

I saw this online "Although you must calculate the RMD separately for each IRA you own, you may withdraw the combined amount from one or more of them." Does this mean that I can withdraw the entire RMD from one IRA CD, ie Navy Federal and Navy says they do not access an EWP for early withdrawal. OR do I have draw to pull a specified amount from each CD in order not to pay the EWP? It would definitely be a plus if I could withdraw the entire RMD from the lowest interest CD. Thank you for any help you can offer!

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aaflygirl
  |     |   87 posts since 2016
I just read Bozo's article on this subject that clarified it for me. Are there any institutions, bank or credit unions, other than SF or Pen Fed that allow withdrawals over the RMD amount with no EWP?
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Bozo
  |     |   1,375 posts since 2011
aaflygirl, as to other institutions, shall we say "it's complicated". Take Patelco FCU for example. While the Member Handbook seems to imply withdrawals from IRA CDs are permitted for folks over 59 1/2 without penalty, there was some "confusion" between the local branch in Lafayette and the home office in Pleasanton (CA). Then there is First Republic Bank. The local branch thought I could, the home office said no.

Bottom line: always check with the home office to make sure.
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aaflygirl
  |     |   87 posts since 2016
I cannot find any information on State Farm that says they will allow any amount over age 59.5 to be withdrawn without the EWP. Can someone post that info if it is available? Thank you!
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alan1
  |     |   877 posts since 2015
This is from State Farm's disclosure for Individual Retirement Account Fixed-Rate Certificates of Deposit:
"Normal distributions will be allowed on IRAs without incurring an early withdrawal penalty for customers who have reached age 59½. Transfers or rollovers to another IRA are not considered normal distributions."
https://www.statefarm.com/finances/banking/resources/bank-disclosures/truth-in-savings
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aaflygirl
  |     |   87 posts since 2016
So, it doesn't sound like they limit the amount as long as you are not rolling over or transferring.
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Bozo
  |     |   1,375 posts since 2011
aaflygirl, that is correct. I have done two "over 59 1/2" IRA CD partial withdrawals from StateFarmBank. The paperwork is fairly straightforward, and you should get a check in 7 - 10 days. The withdrawal request allows you to withhold both Federal and State withholding, which I recommend.
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aaflygirl
  |     |   87 posts since 2016
Why do you recommend that they withhold the fed and state tax instead of making the payment yourself?
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Ricochet
  |     |   522 posts since 2010
aaflygirl. I would guess to keep a confined paper trail of funds for convenience ?
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Ricochet
  |     |   522 posts since 2010
aaflygirl..was mis-posted in a different forum

Nothing | 2 hours ago | Comment #12
Fly girl...re. Your forum post on tax withhold in IRA distribution.

One “beauty “ of Ira withholds is that irs deems the withholding to be done throughout the year and ergo no penalty. If u owe taxes then you may have to file estimates quarterly to avoid penalties but this way you would not. I usually see where I’m at income/taxes in December and take a distribution with tax withheld.
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CTM
  |     |   179 posts since 2010
Because having taxes withheld eliminates the need to properly calculate and pay estimated taxes each quarter.

We have done this trick with wages.

If it looks like we will be under-withheld for the year, for the last couple of paychecks we elect to withhold an additional $ amount for taxes (federal and/or state). Because they are paid via withholding, not estimated payments, they count as if they were withheld during the entire year.
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Bozo
  |     |   1,375 posts since 2011
Posters Ricochet and CTM are spot-on. A withholding from an IRA (even in the last week of December) is deemed spread across the year. Not only does one avoid the pesky quarterly estimated tax payments, a person can continue accruing interest on one's IRA CD until the last possible moment.
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Ally6770
  |     |   4,294 posts since 2010
aaflygirl--
I am not aware that the banks or credit unions take out state income tax. At least not the credit unions that I deal with. I even have a pension that does not take state tax out. So I over compensate in another way to make sure I get enough paid in. In the forms that I fill out there is no place to put in state income tax.
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CTM
  |     |   179 posts since 2010
The Franklin Templeton form has an excellent description, by state, of tax requirements on distributions.

Look at page 5, section 8.

https://www.franklintempleton.com/forms-literature/download/RIRA-FDIST
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