Unemployment and 72t distributions

L1: Unemployment and 72t distributionsWill 72t distributions affect unemployment benefits in the state of california? I am a 43 yr old male. Thanks for any help on this.2010-03-24 21:12, By: Nattie2010, IP: [12.238.246.2]
L2: Unemployment and 72t distributionsI have never heard of unrelated income sources affecting UC benefits and any IRA distribution including a 72t is not related to your employment. But see disclaimer below.It may be possible that the 2,400 of UC that is exempt from taxes under one of the stimulus plans could be affected by other income, but that only relates to whether you get the 2400 exclusion on your 1040or not. It does not affect your gross UC benefits.DISCLAIMER: I am not personally aware of any recent changes to CA UC benefits due to the state budget crisis, so I suggest researching this further with CA sources. Anything is possible with various state budget cuts due to the crisis.Since any 72t plan you would start now would have to last 16 years, the UC amount should not affect your 72t calculations, but it might affect whether you elect to take your full annual distribution in 2010 or a pro rated amount by the month.2010-03-25 00:44, By: Alan S., IP: [24.148.10.164]

L3: Unemployment and 72t distributionsYou may want to consider the option of just takingmoney out of your IRA as needed and paying the taxes and 10% penalty while unemployed, rather than starting a plan that requires you to withdraw money from your IRA for the next 16+ years. You could be back to work next year and be stuck with the plan for a long time. If you do start a 72t, and during that time, you make a mistake, and bust the plan you will owe that same 10% penalty on all withdrawals taken along with interest on most of them. It seems a lot safer to just take what you need while unemployed and pay the penalty. You also run the risk of spendingall that withdrawn 72t money during all those years, and when you are old enough to think of retirement, you will not have the same nest egg that could have been built over the years. If you were not so young,I would not be giving you this advice. KEN2010-03-26 14:17, By: Ken, IP: [71.192.120.143]