72(t)- Requrired Min. Distribution

L1: 72(t)- Requrired Min. DistributionI have helped direct clients to 72(t) distributions on several occasions and have had their CPA”s help them get started. Can anyone shed more light on the ruling for the minimum distribution (the lowest calculation on the 72(t).
(1) Is the IRS suggesting that you CANNOT take less than this calculated amount?
(2) It appears that the IRS is suggesting that the distribution amount needs to be recalculated each year based on the new account balance. Is this correct?2007-04-05 07:50, By: InspiredRetired, IP: [72.94.129.162]

L2: 72(t)- Requrired Min. Distribution
The distribution amount calculated for any yearis both the minimum and the maximum.
The distribution amount must be recalculated each year based on attained age.
The IRS doesn”t make the rules, they merely enforce and the two rules above have been the rules on the Minimum Distribution calculation option since dayone.2007-04-05 08:46, By: Gfw, IP: [74.136.109.63]

L2: 72(t)- Requrired Min. Distribution2) Each year the calculation would use the new attained age AND the prior year end account balance.
It may be a good idea to avoid the RMD method going in and retain the safety valve of the one time switch. If the RMD method is used going in a larger account balance will be needed to produce $x of annual distributions. If the other methods are used, a smaller account balance will permit more IRA assets to be partitioned into separate IRA accounts NOT part of the 72t plan. Those separate accounts can be the source of emergency funds or even a supplemental 72t plan started later on. This is even more compelling for taxpayers starting their 72t plan 7 or more years before modification date because crystal balls are notmuch good for longer time periods.2007-04-05 14:25, By: Alan S., IP: [24.116.66.98]