72t on the Net

SEPP/Roth Conversion

Thank you for your responses. One more question. Although I am 59 1/2 now and have taken five total annual distributions (2006,7,8,9,10), my actual last modification date is 5/8/2011. What are my options for withdrawing IRA funds in 2011? Must I take a full annual Sepp distribution if I take anything prior to my last mod. date of 5/8/2011? Thanks. - continued...

SEPP Calculations

I think you have received good advice and guidance to set up your SEPP PLan and, from your comments, you seem to have a pretty good handle on the process. The suggestion I will make is directed to your CPA-husband.You can learn all you need to know about setting up and running SEPP Plans from the information available on this site and by asking qu - continued...

SEPP Calculations

Most mutual funds and brokers are reluctant to take the responsiblity for the calculations. The IRS places that responsibility on you, the same way you are responsible for the info on your 1040 tax return, even if it is prepared by the best tax preparer. Similarly, most of them will not code the 1099-R with anything other than a 1, and make you fil - continued...

SEPP Calculations

If your Excel spreadsheet matched the IRS examples and our calculators, then you should be Ok. Just make sure that you keep good documentation as the plan operates. If you start with the right interest rate and age and know your calculations, then you only have to worry about the operation of the plan. Don't bother with the joint table, it will onl - continued...

SEPP Calculations

My husband and I are planning to set up a SEPP at Vanguard in August so we can use the June interest. We know the amount we need and are going to use the lump sum from my pension and add some funds from my existing IRA to get it. We feel the calculations are pretty straight forward (my husband is a CPA) but would like a couple of clarifications i - continued...

Choosing Distribution Method

Jim... thanks for catching. The amortization (NOT the annuity) method, based on the same interest rate and age will always produce the highest distribution amount. - continued...

Choosing Distribution Method

Gordon:Go back and read your 07-21-2010 post stating, correctly, that the Amortization method always gives the largest 72(t) distribution amount.Then correct your post of 2 hours ago to which I'm responding. It sounds like you are now stating that the annuitization method gives the largest payout.Jim - continued...

withdrawl amounts

You are right - the number is the number - there really isn't anything like a "range" - the annual distribution amount must be withing about 50 cents of the calculated annual amount. The amortization method will "always" produce the highest distribution based on the same set of assumptions. - continued...

Choosing Distribution Method

It always does.Correction: See corrected post below. - continued...

Choosing Distribution Method

I just ran 72t calcs, on 2 different 72t calculators, and find the annuitization method resulted in the highest payout. (age 51 male - continued...

withdrawl amounts

I am trying to set up a 72t systematic withdrawal from a 403b contract for a 51 year old client (who has separated from service) with a major insurance company, and they are suggesting that the calculated amount (annuity factor method) is but the upper limit on a "range" of possibilities; i.e. "you need to pick a number at, or below, the calculate - continued...

Choosing Distribution Method

If you don't need entire IRA balance for your SEPP plan and you follow Jim's good advice and do the partial transfer before starting your plan, make sure you recalculate the amortization (or any other) payout using the new remaining $$ balance in the fund you plan to designate for your SEPP if it is not the same balance you had used in earlier ca - continued...

Choosing Distribution Method

Or you can set up a 2nd, and even a 3rd SEPP 72-T with the remaining funds if and when you need additional distributions, if that need will continue for at least 5 years or until 59 1/2 if later. If it is a one-time additional need, or for only a couple of years, thenyou would probably be better off not setting up subsequent plans, and just pay the - continued...

Choosing Distribution Method

The "Amortization Method" will give the greatest payout for a given amount in your SEPP Plan account. But the first calculation you need to do is to figure out how much money you will need from the SEPP Plan on an annual basis. Then plug in the amount of money you have into the calculator on this site to see where you stand relative to what that - continued...

Choosing Distribution Method

While there are three methods, most select the amortization method as it will always produce the highest distribution amount using the same interest rate and age. For additional pointers, check out our Planning Pointers page - it is a great place to start. - continued...

Choosing Distribution Method

I'm looking at a 72t and trying to understand why I would choose one method over the other beyond ease of calculation/recalculation and payment size. I find the annutization and amortization play out about the same for me in terms of payout. Any pointers folks can provide on things to consider? I'll likely be working withy a tax person but alw - continued...

72T

I will be getting help setting up my 72(t) but would like a copy of the 20 page Vanguard doc. Always good to have more info/knowledge. Could you e-mail it to sjknuj@earthlink.net. Thanks! - continued...

August AFR

Something else to think about. With interest rates at their current levels, now might be a great time to look into a SEPP using annual recalculation. - continued...

August AFR

It is interesting to note that we now have 3 straight months of declines in interest rates and also in the equity markets. For those who are pondering starting a SEPP plan, now might be an opportune time to act:1) August is the last month for awhile where a rate over 3% may be applied, ie the June rate.2) Use of a 4/30 account balance should be no - continued...

To Stew Corman from sunny Endicott

Would it be against the rules to say "many of the Dow 30 stocks are paying dividends which exceed the fed SEPP rate of 2.83%, for example xyx corp"The real problem is that it isn't relevant - the 120% mid-term rate is published by the IRS - many people with SEPP plans probably earn more and some may earn less, but the 120% mid-term rate is the rate - continued...

To Stew Corman from sunny Endicott

sorry Gfw, I had thought that I was posting generic information about a class of investments ...I provided generic links and simply gave a few examples. If it is possible to edit my long submission to keep within your guidlines,please advise and I can edit it to your satisfaction Would it be against the rules to say " many of the Dow 30 stocks ar - continued...

To Stew Corman from sunny Endicott

Stew Corman from sunny Endicott... We do not endorse or allow postings to endorse specific investments - your post was deleted. - continued...

August AFR

August, 2010... 120% Mid-Term = 2.62%, Applicable Federal Rates for 72(t) and 72(q) distributions. Click HERE - continued...

72t

Hi Ed, Would like a copy of the older and larger Vanguard brochure. Thanks. Marco - continued...

Is this withdrawal amount okay?

Greg:The 5% withdrawal limit stated by MetLife is the maximum you may withdraw without busting the GMWB rider which is added to the basic annuity contract. This has nothing to do with 72(t) withdrawal limits. If the calculated SEPP Plan distribution amount exceeded the 5% GMWB rider limit, then you would bust the rider and create problems with th - continued...