72 t investment

L1: 72 t investmentMyjob with a large company is beingeliminated and I have a choice to make. I can recieve lump sum pension pay out of 200k or take it in the form of an annuity of 1065k per month for my life and also my wifes life. Should I take the lump sum and start a 72t in hopes of drawing as much as the monthly annuity payout which is about6.3 percent interest and still have the lump sum money if the 72t will average 6 percent. I also have 350k in a 401k which I will roll over to an ira but didn”t won”t to use that money. I just wanted it to continue to grow for another 5 years untill I am 62 when I can start to draw ss. I am 57 years old and my company does not allow 401k withdrawals after the age 55 rule. Is the annuity of 1065k per month for life for me and my wife a better deal than starting a 72t with the lump sum. We will need to start one or the other plans by the start of 2008. I have gotten another job but it only pays about 1/3 of the salary that I was making. Will need something to supplement my income. 2007-08-03 12:15, By: samt, IP: [71.228.234.92]
L2: 72 t investmentImmediately check with HR or the 401-k and pension administrators to see if there is any EMPLOYER STOCK in your account. If so, check about the tax provisions for NUA (“NET UNREALIZED APPRECIATION”) which could save you significant taxes on these distributions, and give you immediate access to those funds without any need for a SEPP 72-T and no potential 10& penalty. (See J.K. Lasser “Your Income Tax” for under $ 20 at a super bookstore or office supply superstore.)2007-08-03 12:23, By: dlzallestaxes, IP: [141.151.92.138]

L2: 72 t investmentSam:
Except forDLZ”s “planning” suggestions, you should consult with a localFinancial Planner to address your concerns. Your question involves a quite extensive and complicated process to answer, especially since there are so many more questions that need answering to determine the other elements necessary to solve your delima.
Good luck.
Jim
2007-08-06 07:17, By: Jim, IP: [24.252.195.14]

L2: 72 t investmentI would look into an approach to get you thru the next 2 1/2 years to age 59 1/2 without a SEPP (i.e. home equity loan, refinancing, margin loan on non-retirement investments, etc.) If you can do this, you will have “unlimited access” to your entire retirement nestegg at that time without the SEPP portion tied up for an additional 2 1/2 years to age 62 (5-year minimum period). You apparently need $ 32,000 to get thru the next 2 1/2years( $1,065 per month x 30 months). If you spread this into the 3 calendar years (2007, 2008, and 2009, and possibly into Jan. 2010)in accordance with your respective tax brackets for each year, you could take $ 6,400 in 2007 to report in taxable income, plus a $ 640 penalty ( 10%), then $ 12,800 in 2008, plus $ 1,280 penalty, and similarly in 2009 (but you might find that you can defer some of that until after you are 59 1/2 in order to avoid the 10% penalty on that portion which you could take in Jan. 2010 without penalty also). For a total penalty of no more than $ 3,200 ( and possibly less) you could have all $ 200,000 available to you as needed. This is the type of “financial planning” that a professional should be able to provide you, and help you to understand the advantages, disadvantages, and tax costs of various approaches.2007-08-06 14:07, By: dlzallestaxes, IP: [151.197.27.198]