AFR – Yearly Distribution vs. Monthly Distributio

L1: AFR – Yearly Distribution vs. Monthly DistributioHi,
First, I want to thank you for providing this forum for the exchange of information regarding the SEPP.
Second, I need some clarificationon the following: I was talking to a retirement specialist at Fidelity and I was explainingmy proposed SEPP Plan of taking monthly distributions and he said that maximum rate I could use isthe monthly 120% Mid-term AFR rateand could not use the yearly 120% Mid-term AFR rate. He said for February “03, the monthly 120% Mid-term AFR rate is 3.86% and the yearly 120% Mid-term AFR rate is 3.93%, so there is a .07% difference [small, but not the same].
Looking at the interest ratesin the left hand margin on your web site, I only see the yearly rates, so I am wondering if the Fidelity specialist is correct when he says I need to use themonthly rate and not use the yearly rate if I am taking a monthly distribution.
Can you provide me with some clarification on this……..thanks for your assistance in advance, Jeff
2003-02-20 10:04, By: jeff , IP: [127.0.0.1]

L2: AFR – Yearly Distribution vs. Monthly DistributioActually Rev. Rul. 2002-62 doesn”t say that you have to used the monthly rate or the annual rate.
If you are using a formula for calculating a true monthly distribution, then you should indeed use the monthly rate which is simply the annual rate adjusted for a montly payout.
However, the IRS in a variety of PLRs has also said that it is Ok todo an annual calculation and divide the annual payment by 12 which is the way that we present the information on this site.2003-02-20 10:41, By: Gfw, IP: [127.0.0.1]

L2: AFR – Yearly Distribution vs. Monthly DistributioThanks for information. I see that the March “03 AFR is now posted on your site. Can you provide us with the link to get this information as the www.irs.gov web site no longer lists the AFRs after 12/2002.
Also given the AFR rate for March “03 is 3.89%, do you know the monthly equivalent rate or how I can calculate it from the yearly rate. I”m assuming we can enter this monthly rate intoyour 72t calculator to get the monthly distribution amounts as well. Is this a correct assumption?
Thanks, Jeff2003-02-21 14:14, By: jeff, IP: [127.0.0.1]

L2: AFR – Yearly Distribution vs. Monthly DistributioHello Jeff:
Annual 120% of MT/AFR =3.89%.
Monthly 120% of MT/AFR = 3.82%
Personally, I use www.timevalue.com; just because it is timely, well organized and easy to search for multiple months.
TheBadger
wjstecker@wispertel.net

2003-02-21 14:23, By: TheBadger, IP: [127.0.0.1]

L2: AFR – Yearly Distribution vs. Monthly DistributioThe calculators assume an annual payment and an annual interest rate. For monthly, merely divide the annual result by 12.2003-02-21 15:02, By: Gfw, IP: [127.0.0.1]