One-time recalculation

L1: One-time recalculationWhen we retired in mid-2002, we calculated that we would be able to live simply but comfortably from the allowed 72t withdrawals from our IRAs, after rolling over all our various 401x accounts into them. It took until last month to finally get the boobs at the federal Thrift Savings Plan to complete the rollover. Now, of course, the rules have changed (2002-62), and it would be tough to maintain our full-time traveling lifestyle with the payments that will be allowed. (We are currently living off other savings.)
My question: If we start our 72t withdrawals now, can we later take advantage of the “one-time recalculation” I see mentioned to increase our SEPP withdrawals when interest rates rise again?
Thanks.2003-02-27 10:11, By: Dapper Dave, IP: [127.0.0.1]

L2: One-time recalculationHello Dapper Dave:
What you refer to as a “one-time recalculation” is not quite right. It is really a one-time method switch without penalty from an old method to the RMD method and only the RMD method. Therefore, it is possible, but not probable, that you could switch in the future and increase your distributions.
As an example, a 55 year old using the amortization method would currently get $5824 per $100,000 of IRA. The same 55 year old would get $3378 per $100,000 under the RMD method. Jump forward 3 years, one would need to grow the $100,000 to $160,000 (a compund rate of return near 17%) in order to grow the IRA principal to sufficient size such that the RMD method will yield a higher distribution commencing in year 4.
TheBadger
wjstecker@wispertel.net

2003-02-27 10:58, By: TheBadger, IP: [127.0.0.1]