Setting Up a Basic 72t w/o Bells & Whistles

L1: Setting Up a Basic 72t w/o Bells & WhistlesAll,Thanks in advance for your help. This is a follow-up to teknchuck’s post on 6/29 with additional specific questions.Is there a step by step procedure on how to set up the most basic 72t w/o bells and whistles.In my particular case, a basic calculation, using either the amortization or annuitization method would be adequate to meet my financial goals until I’m 59 1/2. Thanks to many posts from GFW, TheBadger, and this website, I have some confidence that I could get the figures correct; however, the proper implementation (e.g., working with the financial instituition that will administer my 72t account) also concerns me.Here are some of the immediate concerns I can think of:What form(s) should the financial institution issue (i.e., 1099, etc.) and what boxes (on each form) should be checked to ensure compliance with IRS regulations. What happens if they incorrectlty check a wrong box?If I setup the plan to make my first annual withdrawl on 2/1/2003, do I need to make certain the financial institution can deliver my next annual withdrawl on exactly on 2/1/2004? Or is there a “delivery window” (e.g., month of February) that is alternatively acceptable?Again, a step by step procedure, that includes setting up a 72t (on both the owner’s side and the financial institution side) would give me the confidence to do this myself and would be well worth a reasonable price if it exists and is available.Please advise,Best regards,gus825702002-06-29 20:17, By: gus82570, IP: [127.0.0.1]
L2: Setting Up a Basic 72t w/o Bells & WhistleHello gus:The first & most important goal of a 72(t) / SEPP plan is to make sure it meets your goals. After that, the “setup” is really the documentation of the plan in the form of an agreement or contract document which is really an agreement with yourself. This usually takes less than one page and is nothing more than a memorialization of the details. This agreement doesn’t go anywhere & is not filed with anyone.Next, you contact your IRA trustee (typically a brokerage) who really acts as your agent; e.g they do as you tell them to do. Most often, your trustee will have a form they wnat completed; again, often a “check the box” type of affair that you fill out sign & send. Then your done.The periodicity of your distributions is flexible in that ther si no neeed to match distributions tot he day; within the month is fine.TheBadgerwjstecker@wispertel.net2002-06-30 07:52, By: TheBadger, IP: [127.0.0.1]

L2: Setting Up a Basic 72t w/o Bells & WhiThe Badger’s post was right on – document the plan and follow the plan document and all should be ok. Take a look at the sample form that I have posted on the site – it covers about any option that you may want to use.Design the plan and calculate the payment. Then, as suggested, contact the IRA Trustee, provide them with the documentation and assumptions and get their agreement up front that they will code the 1099R appropriately.Please note, they may only agree if they have 100% of the funds. Else they won’t be able to monitor!2002-06-30 12:41, By: Gfw, IP: [127.0.0.1]

L2: Setting Up a Basic 72t w/o Bells & WhistleTheBadger and GFW,Thanks for thoroughly answering my questions.Best regards,gus825702002-06-30 18:13, By: gus82570, IP: [127.0.0.1]