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progree

(11,463 posts)
1. Was the QCD thing a PITA, with medallion signature guarantee and snail mail paperwork ...
Mon Jan 3, 2022, 05:02 PM
Jan 2022

Last edited Mon Jan 3, 2022, 05:48 PM - Edit history (1)

... and idiots muffing that up the first try or two (see Trustone below),

or, I would presume, just a simple electronic transaction (though I haven't noticed that but haven't looked for it at Vanguard or Fidelity or Schwab to see if they make it sane and rational).

I'm eligible this year for the first time to do a QCD, so will be looking into that for sure.

I have a sizable inherited Traditional IRA account that I've been doing RMDs on since 2005 or so, and will continue that likely until as far out as 2034 when the denominator drops below 1.0 and that becomes the end of that.

Doing QCD's on that will be nice: my divisor in 2021 was just 13.6 and my 2021 RMD on this account was about $15,000, meaning my tax bill goes up by $15,000 X my marginal tax rate.

(And my marginal tax rate is higher than one would think from the tax tables because it makes $15,000 more of my capital gains subject to the 15% capital gains tax, so add 15% onto the marginal tax rate that the tax tables show -- something my enrolled agent tax preparer of nearly 40 years of experience didn't know about. The capital gains comes as a result of my charitable gift annuity, sigh.)

Additionally I have a small regular Traditional IRA account - won't have to take RMDs on it until next year, 2023.

I was hoping to, and long long planning to convert this small amount to a Roth in 2021, and so reduce the number of accounts I have (very important to me to simplify my finances) but Trustone Credit Union (Wisconsin and Minnesota branches) tried to cheat me (would not convert it to a Roth unless I liquidated a CD with 2 1/2 years left on it and having a higher interest rate than what is currently available -- that would cost me $200 in lost interest), so after numerous appeals and a social media campaign, I decided to transfer this account to Vanguard.

(They were also, it appears, planning -- as the way to do the Roth conversion -- to liquidate my traditional IRA and "convert" it into a Roth by making a Roth CONTRIBUTION -- that would have been a tax disaster with penalty because I -- not having earned income in 2021 -- am not eligible to make any kind of IRA CONTRIBUTION. So I said, please don't do that!!).

Back to the transfer to Vanguard -- you guessed it, Trustone muffed that up. Even though I started the transfer on November 19 by 2nd day air (yes, a bunch of snail mail crap was required) I didn't find out about the Trustone screwup until December 28, by then too late to even do plan B - a 60 day rollover blah blah.

My inability to convert this account in 2021 was a big financial blow, because 2021 was the last year I got a special tax break for donating my farm to a charity, which would have reduced my tax bite by 30% on doing this conversion. I figure that lost opportunity cost me $1400, GRRRRR

Anyway, I'm stuck with an annoying little regular traditional IRA account that I had hoped to eliminate last year. Probably will just donate it away rather than contend with annual RMDs or QCDs. Too pissed to do a Roth conversion this year at a $1400 higher cost than last year because of the criminals (undisclosed hidden fees) and incompetents at Trustone.

Yes these are the problems of the "wealthy" -- old people that managed to put away a little every year for 40+ years -- and like you say, we have that much more to donate to political campaigns and worthy charities. And not only being not financially dependent on others and the government, but paying a ton in taxes.

Which is why it bothers me so much to read DUers blathering on about the Wall Street Casino where the House has the edge, blah blah and the coming crash the coming crash the coming crash -- https://www.democraticunderground.com/11213498 -- and by convincing themselves that the best they can do is earn a fraction of a percent in a "safe" CD or money market account, they are risking a far higher likelihood of running out of savings in their old age. And less to none to give to worthwhile campaigns and charities.

Yes, a crash is coming sometime down the road, but when you have 2 or 3 doublings of equity values, then occasionally temporarily giving up one of those doublings (which is what happens when the market crashes 50%), still puts one way ahead of fixed income alternatives.

Latest Discussions»Culture Forums»Personal Finance and Investing»Will use QCD again, more ...»Reply #1