Someone who was born in the latter half of 1952 recently turned 72 years old. Today such person logged into their traditional IRA brokerage account with Etrade. Etrade said a Required Minimum Distribution (RMD) for tax year 2024 needed to be withdrawn from the account by April 1st to avoid a penalty. This seemed strange. Said person contacted Vanguard, where another traditional IRA is held, and asked them about RMD. They said there was no RMD for 2024. So then notified Etrade by phone, checked that Etrade had the correct date of birth for the account holder (It was correct), and then asked Etrade to look into the matter and see why the RMD is required for 2024. Etrade said they would get back to the account holder in a few days. Etrade was mystified as to why this happened. I’ll follow up when Etrade replies.
Etrade is clearly wrong about this.
Here’s a good and clear explanation - SECURE ACT 2.0 – WHEN DOES THE RMD START?
And here is the actual IRS explanation (usually less clear) - Retirement topics - Required minimum distributions (RMDs) | Internal Revenue Service
nothing from Etrade yet. Will call again on Monday. I trust they to not plan to just blow this off.
They’ll probably blow it off. At some point, a panicked call will be made to an obscure software developer somewhere to “fix the code” as quickly as possible because tens or hundreds of people already began taking RMDs based on the incorrect advice given by Etrade. And someday an enterprising lawyer might bring a case against them as a class (but s/he won’t win much because it’s hard to prove damages when you simply withdrew your own money. Paying taxes early isn’t necessarily “damage” per se.)