monthly calculations

L1: monthly calculationsI have a question concerning what interest to use. If I set up my sepp in Januarybased on my endingIRA balance on December 31st Iam able to go back 2 months and use the IRS rate of 5.28 from October. But can I still use this rate from October if my custodian does not start sending me my distributions untill February or even March. thanks and merry x-mas.2007-12-24 14:30, By: oliver, IP: [75.140.23.34]
L2: monthly calculationsQuick answer – “The maximum interest rate that may be used is any interest rate that is not more than 120 percent of the federal mid-term rate for either of the two months immediately preceding the month in which the distribution begins. ”
Merry Christmas and Happy New Year!2007-12-24 15:25, By: Gfw, IP: [216.80.125.206]

L2: monthly calculationsOliver,
You need to tell the custodian (in writing) all of the specifics of your SEPP plan, including the specific date thatpayments are to commence, and the ongoing frequency and amount, and not leave it to them to pick a date, all within the constraints of their system, which they shd be able to outline for you in advance. By doing this, you ensure that the rate you are using corresponds to the month of first payment. There is a sample form on this site that I used to outline both of my SEPP plans. Some custodians may make you transfer this info to their form, but it gives you the details that are needed. I set up a 2nd 72t with my Vanguard IRA in May 2007 to help pay for a second home we just purchased (already had a larger 72tfrom my SchwabRA running from 2006) and had it operational and first payment transferred into my checking account on the requested start date, which was within about 15 days from when I submitted the paperwork as I recall, so I should think that most custodians can be responsive if you expect it of them.I avoided picking a date before the 5th of the month for those payments, so I never have to worry about a payment falling into the wrong year of the SEPP plan, when adjustments are made to accelerate a pay date that falls on a holiday, like Jan 1st. Remember that you are driving that bus, not them. As Gordon said, a JAN 08 payment can only use a NOV 07 or DEC 07rate as the max allowable for calculations. Oct rate is no longer in play if not used for a NOV 07 orDEC 07 first payment. Ken2007-12-25 10:11, By: Ken, IP: [24.9.135.78]