Annual recalculation using amortization method

L1: Annual recalculation using amortization methodIn May, 2005 I commenced a SEPP via 72(t) distribution of my traditional IRA. I used the amortization method calculating the payment based on the IRA balance on 3/7/05, 120% interest rate in April, 2005 and my age for that year. I took a one time annual payment for the year. In January, 2006 I requested the custodian to switch to monthly payments, eg., 1/12 of the 2005 annual amount. Now I would like to recalculate the monthly payments using the IRA balance on 3/7/06, 120% interest rate in April, 2006 (5.68%), and my age for 2006. Have I ‘messed up’ by switching from annual to monthly payments for the first 4 months in 2006? How should I calculate the monthly payments given the first four payment in 2006 were based on 2005 calculation? Your thoughts on annual recalculation using the amortization method??2006-03-23 11:33, By: Molly B, IP: [207.14.76.135]
L2: Annual recalculation using amortization methodIf, when you adopted your plan, you set the recalculation date at 03/07 you shouldn”t have a problem with the date. However, you should probably be using the 120% rate for either January or February and not April (unless you wait until May then the highest of Mar/April) to determine the payment – review you plan for details – what does the plan state? Are you documenting what you are doing? What does your Accountant think?
All that matters is that you take out the annual amount for 2006 – based on what you are doing, you”ll probably have to do manual adjustments to the remaing payments so that no more than,and no less than, the annual amount is removed duing 2006 or any future year.
If it was my plan, I would have simplified the issue by using the previous 12/31 balance along with the interest rate for Nov/Dec and performed the calculation in January.
2006-03-23 14:55, By: Gfw, IP: [172.16.1.72]