RMD fee | Ed Slott and Company, LLC

RMD fee

My Mother who is 84 and retired last year is now taking her RMD. The third party company, that was contracted by her employer is charging $100 per year to take her RMD out of her 401K. Two investment people have told me they have never heard of being charged as it is a requirement to take the distribution. Is a charge ethical? Thank you!

I don't know if it is ethical or not, but it is not typical or competive and can be easily avoided for future years by doing a direct rollover to an IRA. If her employer accepted this fee structure, it may be just an indication of other high fees or poor investment options. This type of plan will also likely charge a rollover or exit fee in addition to distributing the RMD, but 2019 would be the last year for RMD fees.

 

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