Money and Business

Hmmm . . . I guess the acronym for the title of this post is CRAP. Oh well, that is not important.

I was thinking about the eventuality of me not being here for the Damsel or vice versa. We each have our own IRAs and have each other as beneficiaries. I wanted to see what would happen to my Required Minimum Distribution (RMD) amount should I not be here or what the withdrawal implications of hers would be if she were to be gone. Hard stuff to think about but it’s gotta be done.

I looked around on the (insert famous savings institution here) website and did not find much information on my specific concerns. Next, I used an on-line search engine with appropriate keywords and found several links. One link to the Charles Schwab IRA Calculator proved to be the exact information I needed to know since it was specific to the beneficiary of an inherited IRA.

I needed to enter several relevant items: the balance of the account as of 12/31/14, date of birth, date of death, type of inheritance (spouse), beneficiary’s date of birth and an estimated annual rate of return. The calculator itself updates immediately with each new entry. I actually like this calculator better than the one found on my IRA holder website.

The answer to my original question of “what happens if . . . ?” is – nothing! When I go, she inherits the IRA just as it is and will continue to have the required minimum distributions just as it does today. If I should inherit her IRA, RMDs won’t be necessary until the year where she would have turned 70½ and the distributions would be based on her date of birth, not mine. The IRA distribution scenarios are identical whether we’re here or not.

After we sold the property in Kalifornistan, we were relieved at last from the jumbo mortgage and the ludicrous L. A. County property taxes, not to mention the cost of insurance, utilities and upkeep. All of a sudden, there was a place in the budget for putting some money away, rather than allocating funds to the aforementioned money sinks. That was the good news.

The bad news is that when the mortgage balance went to zero and our combined checking and savings account were less than a specific (and large) minimum, the bank where we held the mortgage began charging us about a dollar a day in “fees.” It seems that when we did some refinancing a few years ago to provide the funds for building the Arizona home, “they” required us to sign up for this fancy bank product which provided brokerage services, bonus interest rates, bigger discounts, and fee waivers for many common banking services, none of which we needed.

Damsel and I are 15 and 33 year members of two credit unions whose memberships were available as benefits from previous employers. Both have competitive interest rates for the savings accounts and the checking accounts are free of charge. Plus, our only credit card is issued from one of the CUs (we don’t use it much, but it’s good to have).

So, I fired the bank today. It was the obvious thing for us to do. I electronically transferred the funds out of the bank to our joint savings where we have our retirement accounts. I went to the bank branch office here in town and asked them to close the accounts, which they grudgingly did.

While having a branch here in town was convenient for us to deposit checks, etc., we now can electronically deposit our checks to either credit union via scanner or smartphone. That is even more convenient than visiting the local branch. I think we did the right thing in firing the commercial bank.