RMD Service Kit

What’s inside:
• Service
information
RMD Service Kit
• Form
• RMD Service
Agreement
To sign up for—or make changes to your existing—Vanguard Required
Minimum Distribution (RMD) Service
Thank you for your interest in Vanguard’s RMD Service, a free service that we
provide for our RMD-eligible clients. Beginning the year you reach age 70½,
Vanguard will automatically calculate the RMD amount each year for your
tax-deferred IRAs (traditional IRA, rollover IRA, SIMPLE IRA, or SEP-IRA) and
employer-sponsored retirement accounts (403(b)(7) and Individual 401(k) plan
accounts) held at Vanguard. (In certain situations, Vanguard can calculate the
RMD for an inherited IRA; however, it can’t be done through this form. Please
call for additional information.)
In addition to calculating your RMD amount, our RMD Service allows you
to have your RMD automatically distributed each year. Simply select the
schedule and distribution method (reinvestment in a Vanguard nonretirement
account, electronic bank transfer, or check) that you prefer. You’ll receive
statements by mail, and you can track your progress online at any time.
How to enroll (or make changes)
You can enroll in Vanguard’s RMD Service in one of three ways:
>
Online (for IRAs only). Log on to your account at vanguard.com; from
the My Accounts dropdown, select Account maintenance, then Required
minimum distributions to make your selections.
>
By phone (for IRAs only). Call Vanguard at 800-662-2739 on business days
from 8 a.m. to 10 p.m. or on Saturdays from 9 a.m. to 4 p.m., Eastern time.
>
By mail (for all retirement accounts listed above). Simply fill out the
enclosed form and mail it to us. If you have any questions, call us at the
number above.
Frequently asked questions
Do I have to take RMDs?
In most cases, you must take RMDs beginning the year you reach
age 701⁄2 if you own an:
• IRA (traditional IRA, SEP-IRA, SIMPLE IRA, or rollover IRA).
• Individual 401(k) and/or 403(b)(7) plan account.*
If you’ve inherited an IRA or retirement plan account, specific IRS
rules regulate the minimum withdrawals you must take. For more
information, call us at 800-662-2739.
What is my deadline for
taking RMDs?
Generally, you must take your annual RMD by December 31 each year.
However, if you turn 70½ this year, you can delay taking your first
RMD—and only your first—until April 1 of next year. Keep in mind that
if you delay your first RMD, you will have to take two RMDs next year:
one by April 1 and the other by December 31.
How is my RMD calculated?
Your RMD is generally equal to the value of your tax-deferred assets as
of December 31 of the previous year, divided by your life expectancy
factor taken from the IRS Life Expectancy Tables. For examples of how
your RMD is calculated, refer to How to calculate your RMD on the
next page.
What if I have several
retirement accounts?
Multiple IRAs. The IRS requires you to calculate RMDs separately for
each IRA you own. However, the total of these calculations can be
distributed from any one or a combination of those IRAs.
Multiple 403(b)(7) accounts. The IRS requires you to calculate RMDs
separately for each 403(b)(7) you own. However, the total of these
calculations can be distributed from any one or a combination of those
403(b)(7)s.
Multiple Individual 401(k) plans. If you have more than one Individual
401(k) plan, you must calculate RMDs for and take distributions from
each plan separately.
How will an RMD affect
my taxes?
An RMD will increase your taxable income for the year in which you
take it. You’re responsible for including the RMD amount on your
tax return. Although you may elect to have tax withheld from your
distribution, this may not cover your entire tax liability.**
RMDs from an Individual Roth 401(k) plan account are subject to tax on
the earnings portion if they’re taken less than five years after your initial
contribution to the plan.
What if I inherited my IRA
from an owner who died?
You may use the RMD Service for inherited IRAs only in certain cases,
and special distribution rules apply. Call us at 800-662-2739. Don’t use
the Required Minimum Distribution Service Form or the calculation
instructions on the next page.
Please read the enclosed RMD Service Agreement for additional information.
*If you’re still employed at age 70½ and don’t own 5% or more of the company that sponsors your qualified retirement plan, the plan rules
may allow you to postpone your first RMD until April 1 of the year after you retire. This exception doesn’t apply to IRAs.
**Generally, only pre-tax (deductible) contributions and earnings are taxable. Consult with your tax advisor if you have any after-tax money
in your IRA.
How to calculate your RMD
Vanguard will calculate your required minimum distribution (RMD) automatically every year, free of charge. If you’d
like to calculate and take your RMDs on your own, refer to the following table. (You may also refer to IRS Publication
590, Individual Retirement Arrangements (IRAs).) Keep in mind the table is meant to provide a basic understanding of
how your RMD is calculated. It’s not intended to replace the advice of a professional tax advisor, and its use doesn’t
guarantee you’ll satisfy the RMD rules.
Keep these points in mind
• Multiple IRAs. If you have more than one tax-deferred IRA, you must calculate each IRA’s RMD separately. You
can then withdraw the total amount from any one or a combination of your IRAs.
• Multiple 403(b)(7) accounts. If you have more than one 403(b)(7) account, you must calculate each account RMD
separately. You can then withdraw the total amount from any one or a combination of your 403(b)(7)s.
• Multiple Individual 401(k) plans. If you have more than one Individual 401(k) plan, you must calculate RMDs for and
take distributions from each plan separately.
• Individual 401(k) and Individual Roth 401(k). If you maintain both Individual 401(k) and Individual Roth 401(k)
accounts in the same plan, your RMD calculation is based on the combined year-end balance of both accounts. The
RMD may be taken from the Individual 401(k), the Individual Roth 401(k), or from both accounts.
• Choosing an IRS life-expectancy table (see page 2 for the tables). The RMD rules are designed to spread out the
distributions of your entire interest in an IRA or plan account over your life expectancy or the joint life expectancy
of you and your beneficiary. If your spouse is more than ten years younger than you and is your sole primary
beneficiary, calculate your RMD using the Joint Life and Last Survivor Expectancy Table. Otherwise, use the Uniform
Lifetime Table to figure your RMD.
• IRS penalties. If you don’t take your annual RMD by the deadline or if you withdraw less than required, the IRS may
impose a penalty equal to 50% of the amount you underdistributed. Vanguard is required to report your RMD status
to you and to the IRS each year on IRS Form 5498, IRA Contribution Information.
Follow these steps
Examples:
One IRA, spouse less than
ten years younger
Two IRAs, spouse more than
ten years younger and the sole
primary beneficiary
1. Determine the value of
your retirement plans as
of December 31 of last year.*
$25,000
$30,000 (rollover IRA)
$15,000 (traditional IRA)
$45,000
2. Determine the applicable
distribution period. Refer to the
IRS life-expectancy table excerpts
on the next page. Use your age as
of December 31 of the current year
to find the applicable factor.
You will be age 71 and your
spouse will be age 69. (Applicable
factor from the Uniform Lifetime
Table is 26.5.)
You will be age 71 and your
spouse will be age 57. (Applicable
factor from the Joint Life and Last
Survivor Expectancy Table is 29.4.)
3. Divide the amount in Step 1
by the factor in Step 2.
$25,000 divided by 26.5 = $943.40
$45,000 divided by 29.4 = $1,530.61
*If you have employer-sponsored plans, you must calculate a separate RMD for each of those plans.
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IRS Life Expectancy Tables*
If your spouse is more than ten years younger than you and is your sole primary beneficiary, use the Joint Life
and Last Survivor Expectancy Table to determine your distribution period factor. Otherwise, use the Uniform
Lifetime Table.
Uniform Lifetime Table
Age
Factor
Age
Factor
Age
Factor
70
71
72
73
74
75
76
27.4
26.5
25.6
24.7
23.8
22.9
22.0
77
78
79
80
81
82
83
21.2
20.3
19.5
18.7
17.9
17.1
16.3
84
85
86
87
88
89
90
15.5
14.8
14.1
13.4
12.7
12.0
11.4
Joint Life and Last Survivor Expectancy Table
Spousal beneficiary age
Your present age
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
70
35.1
34.3
33.4
32.6
31.8
31.1
30.3
29.5
28.8
28.1
71
35.0
34.2
33.3
32.5
31.7
30.9
30.1
29.4
28.6
27.9
27.2
72
34.9
34.1
33.2
32.4
31.6
30.8
30.0
29.2
28.4
27.7
27.0
26.3
73
34.8
34.0
33.1
32.3
31.5
30.6
29.8
29.1
28.3
27.5
26.8
26.1
25.4
74
34.8
33.9
33.0
32.2
31.4
30.5
29.7
28.9
28.1
27.4
26.6
25.9
25.2
24.5
75
34.7
33.8
33.0
32.1
31.3
30.4
29.6
28.8
28.0
27.2
26.5
25.7
25.0
24.3
23.6
76
34.6
33.8
32.9
32.0
31.2
30.3
29.5
28.7
27.9
27.1
26.3
25.6
24.8
24.1
23.4
22.7
77
34.6
33.7
32.8
32.0
31.1
30.3
29.4
28.6
27.8
27.0
26.2
25.4
24.7
23.9
23.2
22.5
21.8
78
34.5
33.6
32.8
31.9
31.0
30.2
29.3
28.5
27.7
26.9
26.1
25.3
24.6
23.8
23.1
22.4
21.7
21.0
79
34.5
33.6
32.7
31.8
31.0
30.1
29.3
28.4
27.6
26.8
26.0
25.2
24.4
23.7
22.9
22.2
21.5
20.8
20.1
80
34.5
33.6
32.7
31.8
30.9
30.1
29.2
28.4
27.5
26.7
25.9
25.1
24.3
23.6
22.8
22.1
21.3
20.6
20.0
19.3
81
34.4
33.5
32.6
31.8
30.9
30.0
29.2
28.3
27.5
26.6
25.8
25.0
24.2
23.4
22.7
21.9
21.2
20.5
19.8
19.1
18.5
82
34.4
33.5
32.6
31.7
30.8
30.0
29.1
28.3
27.4
26.6
25.8
24.9
24.1
23.4
22.6
21.8
21.1
20.4
19.7
19.0
18.3
17.7
83
34.4
33.5
32.6
31.7
30.8
29.9
29.1
28.2
27.4
26.5
25.7
24.9
24.1
23.3
22.5
21.7
21.0
20.2
19.5
18.8
18.2
17.5
16.9
84
34.3
33.4
32.5
31.7
30.8
29.9
29.0
28.2
27.3
26.5
25.6
24.8
24.0
23.2
22.4
21.6
20.9
20.1
19.4
18.7
18.0
17.4
16.7
16.1
85
34.3
33.4
32.5
31.6
30.7
29.9
29.0
28.1
27.3
26.4
25.6
24.8
23.9
23.1
22.3
21.6
20.8
20.1
19.3
18.6
17.9
17.3
16.6
16.0
15.4
*For the complete tables, see IRS Publication 590, Individual Retirement Arrangements (IRAs), which is available at irs.gov.
© 2010
The Vanguard Group, Inc.
All rights reserved.
RMDBR 122010
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Form RMIDIF
Clear All
Required Minimum
Distribution Service Form
Effective November 2014
Use this form to establish our Required Minimum Distribution (RMD)
Service on your eligible Vanguard mutual fund-only retirement account(s)
or to change or update your existing service. Each year, we’ll calculate
and distribute your RMD based on your eligible retirement assets held
at Vanguard as of December 31 of the previous year. Your selections on
this form will replace any existing RMD instructions on file.
Questions?
Call 800-662-2739.
If you need other forms, go to
vanguard.com/serviceforms.
Don’t use this form if you need to take an RMD from an inherited
retirement account or if you’re making a qualified charitable distribution.
Call us instead.
Print in capital letters and use black ink.
1. Account owner information
Check one.
■ Establish new RMD Service.
Provide the full,
legal name.
>
■ Change my existing RMD Service.
Name first, middle initial, last
Birth date mm/dd/yyyy
Last four digits of Social Security number
Zip code
2. Type of Vanguard retirement account
Check only one. You can use a single form for all of your Vanguard IRAs that are subject to an RMD
(except inherited IRAs). You must use a separate form for each Individual 401(k) or 403(b)(7) plan
that you want to enroll in the RMD Service.
■ IRA including traditional IRAs, rollover IRAs, SEP-IRAs, and SIMPLE IRAs
■ Individual 401(k) including Individual Roth 401(k)*
■ 403(b)(7) plan*
*If you’re still employed at age 70½ or over and don’t own 5% or more of the company that sponsors your plan, the plan rules
may allow you to postpone your first RMD until April 1 of the year after you retire. This exemption doesn’t apply to IRAs. Don’t
send this form until you’re required to begin receiving distributions from your account.
1 of 7
Form RMIDIF
3. Beneficiary information
if applicable
■ Check here and provide your spouse’s birth date if either of the following applies:
• Your sole primary beneficiary is a spouse who’s more than ten years younger than you.
• Your sole primary beneficiary is a qualifying trust whose sole primary beneficiary is a
spouse who’s more than ten years younger than you.
Spouse’s birth date mm/dd/yyyy
4. When you want to take your distributions
Payment schedule
Check only one. If you don’t make a selection, your distribution will be made to you annually on or
about December 15.
Allow two weeks
for us to establish
this service.
>
■ Once a year ■ Once every six months ■ Once per quarter ■ Once per month
Starting month and date mm/dd (from the 5th to the 25th)
Delayed first-year distribution optional
If you reach age 70½ this year, the IRS allows you to delay taking your first RMD—and only the first—
until April 1 of next year. For more information, see the accompanying frequently asked questions.
If you want to delay your first-year distribution until next year, indicate the month and date you’d like
to receive it. Choose either January, February, or March, and a date from the 5th to the 25th.
Otherwise, we’ll issue the distribution on February 15th.
Month
Date from the 5th to the 25th
■ January
■ February
■ March
5. How you want to take your distributions
Check A, B, or C and provide any requested information. Any dividends or capital gains currently
paid to you will instead be reinvested so that the total distribution for the year won’t exceed the
calculated RMD amount.
■ A. From selected Vanguard funds in the IRA(s) or retirement plan account specified
in Section 2. Distribute the following percentages from the Vanguard funds I’ve
indicated. Make sure you have a sufficient balance in each Vanguard fund to cover
your distributions. Percentages must total 100%.
Vanguard fund name or symbol Account number
Percentage
Vanguard fund name or symbol Account number
Percentage
Vanguard fund name or symbol Account number
Percentage
Vanguard fund name or symbol Account number
Percentage
%
%
If you need
more space to
list additional
funds, provide the
information on a
separate sheet.
%
>
%
Total
100%
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Form RMIDIF
■ B. By equal percentages from all Vanguard funds in my IRA(s). We’ll draw an equal
percentage of the RMD amount from each Vanguard fund held in the IRA(s) or
retirement plan account specified in Section 2.
■ C. Proportionately. Vanguard will draw from each fund in the IRA(s) or retirement plan
account specified in Section 2 according to its percentage share of your total Vanguard
fund assets held in that Vanguard fund at the time your RMD Service is established
(for your initial-year distributions) or at the time your RMD is calculated (for future-year
distributions). Proportions may be revised in some instances, such as when certain
changes are made to your RMD Service.
6. How you want to receive your distributions
Check A, B, or C and provide the requested information.
■ A. Invest my distributions in the following nonretirement Vanguard fund accounts
that list me as sole or joint account owner. If I don’t currently have a nonretirement
Vanguard fund account, I’ll open one by completing the Account Registration Form.
Percentages must total 100%.
Fund number
Account number
Percentage
Fund number
Account number
Percentage
Fund number
Account number
Percentage
Fund number
Account number
Percentage
%
%
If you need
more space to
list additional
funds, provide the
information on a
separate sheet.
%
>
%
Total
100%
■ B. Send the proceeds directly to a bank account. Electronic bank transfer can take two
to three business days to arrive at the bank once Vanguard processes your request.
Check one.
■ I want my RMD sent to the bank account I already have on file with Vanguard.
Bank name
If you check this box
and don’t enclose our
Bank Transfer Service
Form, we won’t be
able to process your
distributions until
we obtain the bank
information.
>
Last four digits of bank account number
■ I want to add new bank account information. I’ve also enclosed the Bank
Transfer Service Form, which contains the bank information to which my
RMD should be sent.
Return pages 1–6 of this form, even if some sections are left blank.
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Form RMIDIF
If this box is
checked, a signature
guarantee is required
in Section 8.
> ■ C. Mail checks payable to someone other than me.
Name of payee first, middle initial, last
Mail the checks to:
Street
City, state, zip
7. Income tax withholding elections
• Regardless of your withholding election, you’re responsible for paying any tax due on the taxable
portion of your distributions.
• You may be subject to an underpayment penalty if your estimated tax payments are insufficient
under IRS rules or your state’s rules.
• Your withholding for federal and state taxes can’t exceed 100% of your distribution.
• For an Individual Roth 401(k) distribution, tax withholding will only apply to the earnings portion of
a distribution that isn’t qualified.
• Distributions from an Individual Roth 401(k) account are generally subject to taxation on earnings if
the assets have been held less than five years or if you’re under age 59½.
Federal income tax withholding
Distributions from your Vanguard retirement account or plan are subject to federal income tax
withholding at a rate of 10% unless you check the Don’t withhold box or specify a higher
amount below.
Special rules for addresses outside the U.S.
If your account is registered to an address outside the U.S. or your payment is being directed
outside the U.S., we’re required to presume your tax status to be foreign and withhold 30%
federal income tax from your distribution unless one of the following applies:
• You’re a U.S. person (including a resident alien) and we have a valid IRS Form W-9 on
file. We’re required to withhold 10% federal income tax from your distribution. You can’t
elect out of federal income tax withholding for distributions delivered outside the U.S.
• You’re not a U.S. person and we have on file a valid IRS Form W-8 on which you’ve
claimed tax treaty benefits. If you’re eligible for a reduced withholding rate based on a
tax treaty your country has with the U.S., you may claim the reduced rate by completing
Form W-8, including the section titled “Claim of Tax Treaty Benefits,” and providing either
your U.S. taxpayer identification number (TIN) or your foreign TIN. If your claim is valid, the
reduced rate will be applied.
If you have an address outside the U.S. and aren’t sure whether we have a Form W-9 or W-8
on file for your account, please call us. We’ll provide you with further instructions for completing
either a paper Form W-9 or an electronic Form W-8.
Note: Vanguard is
required to withhold
10% from each
distribution if neither
box is checked.
■ Don’t withhold federal income tax from my distributions.
> ■ Withhold at a rate of
% from my distributions.
The rate must be at least 10%.
Return pages 1–6 of this form, even if some sections are left blank.
4 of 7
Form RMIDIF
State income tax withholding
Vanguard will apply withholding for your state as you instruct below. If you have questions regarding
state withholding, contact your tax advisor or your state’s taxing authority. If you’re not a resident
of one of the following states, skip to Section 8.
Provide your state
of residence, if
applicable.
>
Residents of Iowa, Kansas,
Maine, Massachusetts, Nebraska,
and Oklahoma
If federal tax is withheld, state tax withholding is
mandatory. Vanguard will automatically withhold
the minimum required by your state unless you
specify a higher amount below.
Residents of Arkansas, California,
Delaware, Michigan, North Carolina,
Oregon, and Vermont
If federal tax is withheld, state tax withholding is
mandatory unless you specifically elect not to have
state tax withheld. Vanguard will automatically
withhold the minimum required by your state unless
you either check the Don’t withhold box or specify a
higher amount below.
Residents of Indiana, Louisiana,
Missouri, Montana, New Jersey,
New Mexico, New York, Utah,
and Wisconsin
State tax may be withheld regardless of your federal
withholding election. Vanguard will follow your state
withholding instructions as indicated below. If no box
is checked, we won’t withhold.
Residents of Mississippi
If federal tax is withheld, state tax withholding is
mandatory if your distribution is subject to the federal
early withdrawal penalty. Vanguard will automatically
withhold the minimum required by Mississippi unless
you specify a higher amount below.
Residents of Maryland (applies to IRA
accounts only)
State tax may be withheld regardless of your federal
withholding election. Vanguard will automatically
withhold the minimum required by Maryland unless
you check the Don’t withhold box or specify a higher
amount below.
Residents of Virginia (applies to
403(b)(7) and Individual 401(k)
plans only)
If federal tax is withheld, state tax withholding is
mandatory. Vanguard will automatically withhold the
minimum required by Virginia unless you specify a
higher amount below.
Residents of Georgia (applies to
403(b)(7) and Individual 401(k)
plans only)
If federal tax is withheld, state tax withholding is
mandatory unless you specifically elect not to have
state tax withheld. Vanguard will automatically
withhold the minimum required by Georgia unless
you either check the Don’t withhold box or specify a
higher amount below.
Residents of Washington, D.C.
(applies to brokerage IRAs only)
If federal tax is withheld, state tax withholding is
mandatory if you’re taking a lump-sum distribution
from your IRA. Vanguard will automatically withhold
the minimum required by Washington, D.C., unless
you specify a higher amount below.
Vanguard will use the address of record on your account to determine
state withholding requirements. If the state listed on your account
isn’t your legal state of residence, provide that information here.
State of residence
Check one.
■ Don’t withhold state income tax from my IRA distributions.
■ Withhold my state’s minimum requirement.
■ Withhold my state’s minimum requirement, plus this percentage:
%
5 of 7
Form RMIDIF
8. Signature(s)
Read carefully before signing.
Plan administrator signature
if applicable
Important: If the distribution is from an Individual 401(k) plan or a 403(b)(7) plan that’s subject to the
Employee Retirement Income Security Act (ERISA), the plan administrator must sign below.
Title of plan administrator
Name of plan administrator first, middle initial, last
If you’re both the
plan administrator
and the account
owner, you must sign
here and below.
Signature of plan administrator
Date mm/dd/yyyy
> X
Account owner signature
required
By signing this Required Minimum Distribution Service Form, you authorize Vanguard to make your
distributions in accordance with the instructions on this form and acknowledge that:
• You have received, read, understood, and agree to the terms of the RMD Service Agreement and
Schedule A, which are incorporated by reference.
• You understand that Vanguard will calculate and distribute the amount of the RMD based on the
account balances at Vanguard as of December 31 of the previous year and in reliance on the
information you have provided to Vanguard.
• You understand that the amount calculated by Vanguard will not take into account any retirement
plan assets that you may have invested at any other financial institution or at Vanguard, other than
those employer plans specifically eligible, and that it is your responsibility to ensure that you have
complied with federal tax law regarding required minimum distributions.
• You agree to indemnify and hold The Vanguard Group, Inc., Vanguard Marketing Corporation,
Vanguard Fiduciary Trust Company, the investment company members of The Vanguard Group,
their affiliates, and their respective officers, employees, and agents harmless from any liability
or expense incurred in calculating and/or distributing your RMD when the calculations and/or
distributions were done based on information you, a prior owner, or beneficiary provided.
Important: If you elected in Section 6C to have checks mailed to a different payee and/or address,
you must obtain a signature guarantee. Don’t sign below until you’re in the presence of an
authorized officer.
If a signature
guarantee is required,
DO NOT sign this
form until you’re in
the presence of an
authorized officer.
Signature of account owner
> X
Signature guarantee
Authorized officer’s title
You can get a
signature guarantee
from an authorized
officer of a bank, a
broker, and many
other financial
institutions.
A notary public
CANNOT provide a
signature guarantee.
Date mm/dd/yyyy
if required
Signed guarantee stamp must be original and
state “Signature guaranteed”
Name of institution
>
Date mm/dd/yyyy
Return pages 1–6 of this form, even if some sections are left blank.
6 of 7
Form RMIDIF
Mailing information
Make a copy of your completed form for your records.
Mail pages 1-6 of this form—even if some sections are left blank—and any other required forms in
the enclosed postage-paid envelope.
If you don’t have
a postage-paid
envelope, mail to:
>
Vanguard
P.O. Box 1110
Valley Forge, PA 19482-1110
For overnight
delivery, mail to:
>
Vanguard
455 Devon Park Drive
Wayne, PA 19087-1815
Reminders
If you elected in Section 6A to transfer the distributions to a new nonretirement Vanguard fund
account, complete and submit our Account Registration Form along with this form.
If you elected in Section 6B to transfer the distributions to a bank account not already on file with
Vanguard, complete and submit our Bank Transfer Service Form along with this form.
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© 2014
The Vanguard Group, Inc.
All rights reserved.
RMIDIF 102014
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RMD Service Agreement
1. Overview
The Vanguard Group, Inc., or Vanguard Brokerage Services, or an affiliate of either (collectively, “Vanguard”), will
calculate and notify you of the amount you may be required by federal law to take out of IRAs and certain other
retirement plans you hold at Vanguard. This amount is called your required minimum distribution (“RMD”). You
may call us, write to us, or log on to your account at vanguard.com to take your RMD at any time throughout the
year. Or you can enroll in Vanguard’s RMD Service (the “Service”). The Service allows you to set up an automatic
distribution plan that is designed to assist you in taking your RMD each year. The terms and conditions of the
Service are explained below. You may enroll in the Service by completing a form and mailing it to Vanguard or, for
certain types of retirement plans, by completing a questionnaire by phone or online at vanguard.com.
As long as you remain in the Service, Vanguard will provide a confirmation of your RMD amount and the
distribution option you selected on an annual basis. You may cancel your participation in the Service at any time
online or by calling or writing to Vanguard. However, Vanguard will continue to calculate and provide you with an
annual notification of your RMD amount as long as you are required to take RMDs from an account at Vanguard.
Vanguard does not automatically calculate RMDs for inherited retirement accounts. Subject to Vanguard policies
and procedures, a beneficiary of an inherited retirement account may enroll in the Service to have Vanguard
calculate and provide notification of the RMD amount, and set up an automatic distribution plan. Beneficiaries
of inherited retirement accounts may enroll in the Service by completing a questionnaire by phone or online at
vanguard.com. Not all inherited retirement accounts are eligible for the Service.
2. Services
RMD calculation
Vanguard will calculate your RMD based on all holdings in your eligible retirement plan accounts, excluding any
nonpublicly traded securities, as of the prior December 31. You are solely responsible for the valuation of and
RMD calculation for any nonpublicly traded securities held in your Vanguard retirement plan accounts.
Vanguard’s calculation of your RMD is based upon Internal Revenue Code Section 401(a)(9) and the regulations
thereunder, as amended, using certain information contained in Vanguard’s records and certain additional
information that you may provide.
All information about you and your accounts from Vanguard’s records is based upon such information available to
Vanguard as of December 31 of the prior calendar year. Vanguard assumes that all information provided by you or
by any prior owner or beneficiary of the retirement plan account was correct when provided and remains correct.
Vanguard has no responsibility to verify the accuracy or completeness of such information beyond that imposed
by law.
When Vanguard calculates the RMD amount in any given year, we will not include amounts that may be due
from any retirement plan accounts you may have at other financial institutions or from any qualified employer
plan accounts you may have, whether or not invested at Vanguard, other than those employer plan accounts
specifically eligible.
For any current year, upon your request, Vanguard will adjust the prior December 31 value of your IRAs and
eligible Vanguard retirement plan accounts (for purposes of calculating your RMD) to reflect certain asset
transfers, rollovers, recharacterizations, or account adjustments made after December 31. You agree that you
are responsible for the accuracy and completeness of any such information provided from a source other than
Vanguard’s records. Vanguard reserves the right to request documentation regarding such a change, including
written statements from other providers, prior to making the requested adjustment.
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Distribution options
Vanguard will distribute your RMD from your IRA(s) or other retirement plan(s) for each year you are enrolled
in the Service in accordance with your instructions. If you have more than one eligible IRA or other retirement
plan, you may choose from which IRA or plan you wish to take distributions under the Service. You may
choose to have your distributions made annually, semiannually, quarterly, or monthly during each year you
remain in the Service. You may change the frequency of such distributions and the plans included in the Service
at any time and from time to time. You can take your RMD amount only from Vanguard mutual funds.
If you are enrolling to have distributions start in the current year and have selected semiannual, quarterly, or
monthly distributions, the Service will calculate each distribution based on the number of periodic distributions
remaining in the current year so your RMD is distributed before December 31 of the current year. For example,
if you enroll in May and select quarterly distributions, your RMD amount will be distributed in three equal
payments for the current year and in four payments in future years.
You may take your distributions by electronic bank transfer to a bank account linked to your Vanguard retirement
account. Once this option is established, if a transfer cannot be completed for any reason, Vanguard may send you
a check for that distribution. You may also take your distributions by check to your address of record or to a different
payee and/or address.
You may also have the option to have your RMD payment automatically invested in a Vanguard nonretirement
account (the “automatic exchange” option). If you do not have a Vanguard nonretirement account at the time
of enrolling in the RMD Service, and wish to set up the automatic exchange option, you must establish the
nonretirement account prior to enrolling in the RMD Service. (Note: The automatic exchange option may not
be available for all types of retirement accounts.)
If your RMD cannot be paid in accordance with your distribution instructions for any reason, your RMD
Service may be terminated by Vanguard. Vanguard will notify you of any termination and you must contact
Vanguard to restart the Service. If the balance of any of the mutual funds you choose to have your RMD paid
from are insufficient to pay your RMD according to your distribution instructions, you must contact Vanguard
to update your distribution instructions (including authorization to pay your RMD from other Vanguard funds,
if applicable). Vanguard will not be responsible for your failure to take at least the minimum required amount
(an “underdistribution”) from your retirement account.
Any distribution you take prior to enrolling in the Service will reduce the RMD amount to be distributed through
the Service in that year. After you enroll in the Service, distributions you take outside of the Service will not reduce
the remaining RMD amount to be paid under the Service, except in certain instances when the Service is updated.
This may result in you taking more than the minimum required amount.
Eligibility for Service
Vanguard reserves the right to limit eligibility for the Service. If you did not have a retirement account eligible for
the Service as of December 31 of the prior calendar year, the Service may not be available to you.
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Taxes
Distributions from retirement accounts generally will result in ordinary income taxes to you. The Service offers
you the option to have federal taxes withheld from any distribution. If your account is registered to an address
outside the United States or your payment is being directed outside the United States, your distribution may be
subject to mandatory federal withholding at a rate of 30%. In addition, state withholding is available for certain
states and may be required depending on where you live.
Vanguard is not responsible for determining whether amounts withheld from a distribution, if any, are sufficient
to meet your tax obligations, including estimated tax payments. You are solely responsible for payment of any
and all taxes, including penalties, and for compliance with your tax obligations under federal, state, and local laws.
Current law imposes tax penalties for failure to take RMD amounts when required to do so.
Vanguard strongly encourages you to verify with your own tax advisor whether you have met your obligations in
any given year and to determine the tax consequences to you of taking distributions from retirement plan accounts.
3. Enrollment
You may enroll in the Service by completing the applicable Required Minimum Distribution Service Form and
sending it to Vanguard or, for certain retirement plans, by completing the questionnaire for the Service by phone
or online at vanguard.com.
4. Fees
There is no fee for the Service, although Vanguard reserves the right to change this policy at any time. Vanguard
will provide thirty (30) days’ notice to you prior to the effective date of any change to the fee policy.
5. Your responsibilities
You are responsible for providing Vanguard with all information needed to perform the RMD calculations beyond
the information in Vanguard’s records as of December 31 of the prior calendar year. You are also responsible
to inform Vanguard if any of the information you provide during enrollment for the Service or have previously
provided is or becomes inaccurate.
Vanguard is not responsible for the completeness or accuracy of any calculation performed based upon
incomplete or inaccurate information received from you or from any prior owner or beneficiary. You are solely
responsible for ensuring that any distributions made under this Service satisfy your RMD obligation and for the
tax consequences of any distributions from your accounts.
Vanguard does not determine whether you are eligible for any tax benefit that may be available to you under
the minimum distribution rules. Vanguard strongly recommends that you consult with your own tax advisor
to determine your eligibility for any special tax benefit and to ensure your compliance with applicable law.
6. Other disclosures
Standard of care
Vanguard and its representatives will perform the services described in this Agreement in good faith and in
accordance with applicable law. However, except for gross negligence, willful malfeasance, or bad faith, neither
Vanguard nor any Vanguard affiliate will be held liable for any action performed or omitted, or for errors of
judgment made in the performance of these services.
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Effectiveness, assignment, and termination of Service
This Agreement becomes effective upon your enrollment in the Service. You may cancel your participation in the
Service and terminate this Agreement at any time by calling or writing to Vanguard or by canceling your Service
option online at vanguard.com. You may not assign your rights and responsibilities under this Agreement
without Vanguard’s written consent.
Vanguard may amend this Agreement at any time for any reason. Vanguard reserves the right to terminate this
Agreement if, in the sole opinion of Vanguard, you fail to provide complete and accurate information, or at any time
for any reason, by notifying you in writing. Vanguard reserves the right to terminate or revise the Service at any time.
If you wish to cancel the Service, please send your written request to:
Vanguard
P.O. Box 2600
Valley Forge, PA 19482-2600
Notices
Any notices that Vanguard is required to give you under this Agreement shall be made in writing and may be
delivered by United States mail to your address of record or electronically to your e-mail address of record if you
have consented to electronic delivery of agreements from Vanguard.
© 2014
The Vanguard Group, Inc.
All rights reserved.
RMDSAPT 072014
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Schedule A: Assumptions
1.
The shareowner is responsible for selecting specific investments to be used for distribution purposes. If
the balances in the selected investments are insufficient to satisfy the RMD at the time of distribution, the
shareowner authorizes Vanguard to take distributions from any and all other Vanguard investments held
within the same retirement plan.
2.
If insufficient funds remain in a shareowner’s retirement plan to satisfy the RMD at the time of a distribution, the
Service may be converted to calculation-only.
3.
In calculating RMD, the Service will use the life expectancy factor(s) from IRS life expectancy tables set
forth in Treasury Regulation §1.401(a)(9)-9.
4.
Vanguard will use the uniform lifetime table in most instances to calculate RMD for the original shareowner
and for a spousal beneficiary who assumes the retirement plan. If the shareowner is eligible to use the joint
and last survivor table, the shareowner may specifically request that Vanguard use that table. In some
instances, if eligibility is supported by Vanguard’s records, Vanguard may use that table even if the
shareowner has not specifically requested its use. Vanguard will use the single life expectancy table to
calculate RMD for beneficiaries of inherited retirement plan accounts.
5.
In making its calculation, the Service calculates RMD separately for each retirement plan. If the shareowner
has multiple Vanguard IRAs, the Service aggregates the RMD amounts for all of the shareowner’s IRAs
(except for inherited IRAs). The Service does not aggregate RMD amounts for multiple individual 401(k) plans
or 403(b)(7) plans owned by the shareowner or for inherited plans of any kind.
6.
At the shareowner’s request and in accordance with the Service’s then applicable policies and procedures,
the Service will adjust the prior December 31 balance to account for any amounts transferred into Vanguard,
including rollovers and asset transfers, in the current calendar year and for any adjustments to the prior
December 31 balance, including recharacterizations, made in the current calendar year. Vanguard reserves
the right to request documentation regarding such a change, including written statements from other
providers, prior to making the requested adjustment.
7.
For the original shareowner, if the spouse is the only beneficiary in Vanguard’s records on January 1 of any
year, the Service assumes the spouse is the sole primary beneficiary of the original shareowner for the
entire year. Any beneficiary changes concerning the spouse communicated to Vanguard will be reflected in
the following year’s calculations.
8.
Cash dividends will be automatically switched to “reinvest” when a shareowner signs up for the Service.
Cash dividends already distributed in the calendar year during which the shareowner begins the Service will
count toward the RMD amount for that year.
9.
The Service will be limited to the calculation-only option if any of the following conditions occur at the time
of enrollment or at the time of any scheduled distribution:
• There is a purchase and/or redemption freeze on the account;
• The account is in RPO status (mail repeatedly returned from post office as undeliverable);
• The account is in escheatment status.
If the freeze, RPO status, or escheatment status is lifted or corrected, the shareowner must reenroll in the
Service to obtain the calculation-distribution option.
10. The Service does not provide calculations based upon any rights a shareowner may have under a qualified
domestic relations order (QDRO) or any court order or agreement. Special rules may apply.
11. The Service does not differentiate between pre-1987 and post-1986 contributions into 403(b)(7) plans.
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12. The Service does not reflect any distributions or exchanges taken from accounts enrolled in the Service
other than RMD distributions under the Service or distributions taken prior to the date the RMD is calculated
or recalculated for that year. As a result, additional distributions or exchanges in any year may result in overdistribution of the RMD amount for that year.
13. If multiple beneficiaries of the same retirement plan account enroll in the Service and confirm to Vanguard
that they meet the legal requirements to receive separate account treatment under §1.401(a)(9)-8 of the
Treasury Regulations, including the requirement to separate the plan account into separate accounts by no
later than December 31 of the year after the shareowner’s death, the Service will calculate RMD for each
beneficiary on the basis of that beneficiary’s life expectancy factor under the single life table. If such legal
requirements are not met or all the beneficiaries have not confirmed to Vanguard that such requirements
have been met at the time of enrolling in the Service, the Service will use the life expectancy factor of the
oldest beneficiary from the single life table for RMD purposes.
14. Vanguard relies solely on trustee(s)’ representation that the beneficiaries of a trust that is a beneficiary of a
retirement account may or may not be treated as designated beneficiaries under Treasury Regulations
§1.401(a)(9)-4, Q & A-5.
© 2013
The Vanguard Group, Inc.
All rights reserved.
RMDSASAP 092013
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RMDCV 092013
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