how long do I have to stay with plan

L1: how long do I have to stay with planI am starting a sepp this year using the uniform table with a fixed amorization method. My question is how long do I have to use this method once started and when can I switch to a single life table using a required min distr method ( I am 46 yrs old) if I want to use the one time change allowance?2005-08-12 12:41, By: Don, IP: [69.251.152.161]
L2: how long do I have to stay with planFor an answer to your first question, please use the “Last Payment Date” calculator for the menu.
Rev. Rul. 2002-62 Section 2.02(b)…

(b) One-time change to required minimum distribution method. An individual who begins distributions in a year using either the fixed amortization method or the fixed annuitization method may in any subsequent year switch to the required minimum distribution method to determine the payment for the year of the switch and all subsequent years and the change in method will not be treated as a modification within the meaning of 72(t)(4). Once a change is made under this paragraph, the required minimum distribution method must be followed in all subsequent years. Any subsequent change will be a modification for purposes of 72(t)(4). 2005-08-15 11:34, By: Gfw, IP: [172.16.1.79]

L2: how long do I have to stay with planOK, the simple case for this is a plan with the first distribution in Jan and the change is made in Jan of a subsequent year. How does this work if the plan was initiated in a month other than Jan and the change is made in yet another month?2005-08-15 18:27, By: John, IP: [71.208.236.125]

L2: how long do I have to stay with planDon:
Generally speaking, the month for starting and ending a plan is moot. The key is the amount of money you withdraw within a particular year.
Let’s say you start this year and your annual distribution calculates to be $24,000, but you take it $2,000 per month and only take $6,000 out for this year, 2005. That’s OK. Then for the next two years, 2006 and 2007, you take the full amount, $2,000 per month.
Then for whatever reason you decide in June of 2008 to make the change to RMD and that calculates to be $6,000 per year or $500 per month, but you have already taken $12,000 out of your plan at $2,000 per month, you have a problem. If you follow through and make the change in June of 2008 you will have a busted plan. However, if in March of 2008 you make the change to RMD and you have only taken out the $6,000 amount, and you don’t take anymore from the plan in 2008, you are fine.
One small twist. If you make the change in 2008 and any distributions above the $6,000 total figure are “rolledover” back into the plan within 60-days of distribution, you are OK as long as you stop future distributions for the year.
Hope this helps.
Jim2005-08-16 08:39, By: Jim, IP: [70.184.1.35]

L2: how long do I have to stay with planThanks for the details!2005-08-16 09:19, By: John, IP: [71.208.236.125]