Multiple IRA”s 72T withdrawls

L1: Multiple IRA”s 72T withdrawls
When i retire i(and transfer my SEPP to an IRA) am considering spliting my IRA among several companies (Vanguard and T Rowe Price) or among 2-3 funds with just Vanguard or T. Rowe Price. Reason being my IRA is fairly substantial and a large part of my retirement and want to spread my risks. I know this is a little more complicated tax wise but Is this acceptable to the IRS?
Instead of taking $4,000 or $5,0000a month from one company/one fund i want to take $2000-$2500 per month from two different funds and or companies.
I want to add that i would do a minimum of 2 but no more than 3 fund/companies to keep things manageable if this is permitted by the IRS.
Also anyone have any comments or suggestions i would welcome your expeinces.
Thanks.2006-12-27 17:23, By: usagolfho, IP: [69.84.97.119]

L2: Multiple IRA”s 72T withdrawlsYou can have as many custodians and/or accounts as you wish that are part of your SEPP universe. Of course, the more complexity the greater the chance of an error. In your opening sentence, you probably meant that you were going to transfer your company plan such as a 401k to a traditional IRA, and then initiate a SEPP program.
The most basic question is whether you will really need a SEPP plan or not. If you separate from service in the year you reach 55 or later, then any periodic distributions your plan allows you to take are exempt from the early withdrawal penalty. You could avoid the formalities of a SEPP. Likewise, if you work until age 59, you could also arrange to avoid a SEPP since the penalty stops at 59.5 for IRA distributions.
But if you are going to retire early, the next question is whether you have enough IRA assets to keep some of them in a separate account outside of the SEPP plan. This provides you with flexibility and a safety valve if you need extra money. If you don”t need all your accounts to be part of the SEPP, then try to get the accounts that are with one custodian. You still avoid having all your eggs in one basket, and it”s more simple.
But if you have to, the IRS DOES permit what you proposed. There is no limit.

2006-12-27 20:51, By: Alan S., IP: [24.116.66.98]

L2: Multiple IRA”s 72T withdrawlsThe simpler your SEPP plan is constructed, the easier to operate and the less chance of a screw-up leading to IRS penalties. So while it”s OK to use multiple custodians at different fund companies as you have described, I have two suggestions for simplification. Depending on how “substantial” your 401(k)and IRA accounts are should help determine which course your take.
My first suggestion is to use a brokerage account platform, either with an independent advisor or a wirehouse or DIY with an “online” custodian. With this environment you can purchase all of the funds you wish from different fund companies and have them in oneaccount at one custodian. The custodian makes all distributions from the single accountand you get one Form 1099-R at the end of the year. You are free to buy, sell or exchange funds, stocks, bonds, etc, within theaccount without having to worry about multiple custodians. This is much more flexible and less complicated than using separate, multiple fund companies.
My second suggestion is to use a Registered Investment Advisor (RIA) to set up a “separate account” environment for your IRA. This arrangement may look like my first suggestion, but you get the benefit of professional money management for your investments. The accounts usually consist of individual stock and bond positions, or Exchange Traded Funds (ETF”s). The RIA is compensated on a fee basis and will usually include all costs within the one-fee structure. In order to utilize this arrangement, size (of your account) does matter. Since you characterize your account as “substantial,” then I suspect this may be a good option for you to consider.
Whatever course you take, build a good investment plan first. While you don”t want to pay the highest fees you can find, don”t get hung-up trying to find the cheapest things out there. Too many times people let fees drive their investment decisions and miss out on good options.
Good luck.
Jim2006-12-28 06:59, By: Jim, IP: [70.184.2.72]