Bank used wrong RMD table and took out too much
My spouse is more than 10 years younger than me and is the sole primary beneficiary for my IRA. I sent the bank where I have the IRA the bank’s form for RMD withdrawal requests, and specified the correct withdrawal amount (based on the Joint Life Expectancy table). The bank sent me a check for a different amount, which was the amount using the Uniform Lifetime table (the wrong table). I notified that bank regarding the problem, but seem to be getting the run-around. What can I do to get the bank to correct the problem? Also, next year, do I use what would have been the correct amount for the 2023 year-end balance as the numerator in the RMD calculation, or do I use the actual amount of the 2023 year-end balance as the numerator in the RMD calculation?
Permalink Submitted by PaulC on Mon, 2024-03-18 15:41
Custodians of IRAs are required to provide information to the account owner on the required RMD amount, but they are not required to make distributions of the RMD. A reason they’re not required is that RMDs don’t have to be taken from each IRA, but rather amounts can be aggregated and taken from the IRA, or IRAs, of the owner’s choosing. That is an option when someone has more than one IRA. As long as the total RMD amount is taken, it doesn’t matter from which combination of IRAs that it comes from. It’s the IRA owner’s decision, not the custodian’s.
The bank should not be making the RMD unless you’ve authorized them to do so. You should check on whether you’ve authorized an automatic distribution of the RMD.
Going forward, you will need to use the actual 12/31/2023 balance to determine the 2024 RMD. The RMD is simply the minimum distribution, if someone takes out more, even in error, the resulting ending balance is what’s used for the calculation.