Discussion Forum

This forum is provided for informational purposes and it not intended to be relied upon as a source of investment, tax or legal advice. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of the 72tNET.com owners, or the sponsors or firms affiliated with the author(s). Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Please read our Forum Rules.

Refer to this template when submitting a new post https://72tnet.com/forum-template/. See the Tools and Resources menu for Distribution, Minimum Balance and First Modification Date calculators, current AFR rates, and other resources.

Edit your subscriptions by clicking on this link https://72tnet.com/community/subscriptions/ .

72 t questions  


chop chop
Posts: 3
(@chop-chop)
Eminent Member
Joined: 1 week ago

Trying to set up 72 t. I took a buyout at age 53.9 

age now 55 , but read to use age at end of year so will use 56. Is this right

2 ira accounts to use for 72 t,   A pension rollover and a 401 k rollover

1 403 b that will be able to use later this year for emergency

2 roth ira for legacy account or to tap later 

so age 56 = 29.7 single life

app fed rate is (2.03) ,but I would like to use (1.1) Is this OK, I read that it is as long as its lower.

Amortization Method = enough for me with my wife's retirement and the 403 b and roths to fall back on.

The 2 rollover ira's are in a Managed Vanguard account and are diversified like 1 account. If they were in 1 account i would think they could be rebalanced easier and not have something kill the plan. I'm afraid some of the funds could get low and don't know if they could move some money between plans to rebalance. Would this kill it.

Would like to draw Quarterly and make things as simple as possible to avoid making mistakes for them and me.

 

4 Replies
dlzallestaxes@msn.com
Posts: 26
(@dlzallestaxesmsn-com)
Illustrious Member
Joined: 7 months ago

Instead of using a lower interest rate, I. and others on this website, recommend using the "MINIMUM BALANCE CALCULATOR" link on this website. This will calculate the Minimum Balance that you will need using the Maximum Interest Rate to give you the ANNUAL DISTRIBUTIONS that you need. That will give you flexibility to set aside the balance of the IRA account(s) into a separate IRA account that you can use later for emergencies, but more importantly, will be available for you to withdraw ANY amount after 59 1/2, while your SEPP -72T is tied up for 60 months, which in your case will be until you are 61. If you and your wife are both retired, or your total GROSS income is < $ 105,000 ( i.e. < $ 80,000 after the Standard Deduction), then you might also consider ROTH CONVERSIONS until 59 1/2, and then IRA distributions, in conjunction with your non-retirement investments paying Qualified Dividends and Long-Term Capital Gains, both of which are taxed at a special tax rate of -0-% !!!

If you give us the amounts, roughly, in each account, and your wife's age, we might be able to be more specific. Also, I strongly recommend that you consult with a tax professional, and your Estate attorney, to discuss the impact of the new SECURE ACT on your IRAs going forward. I just spent 1 1/2 hours yesterday on a webinar, and again another 1 1/2 hours today on another webinar just on this aspect. It is very complex, and if you have children, and grandchildren, I suggest that you do this ASAP. Also, make sure that you have a lot of life insurance to cover the income taxes that will ultimately be payable when the next generation are REQUIRED to take their distributions out within 10 YEARS !!!! (Spouses can still use their life expectancy.)

Reply
3 Replies
chop chop
(@chop-chop)
Joined: 1 week ago

Eminent Member
Posts: 3

2,250,000.00 in ira's for sepp

365,000.00 for 403-b that we don't plan on using before 70 unless emergency.

440,000.00 in roth's that we would leave untouched for kids

Wife, (Teacher) will be 55.4 and receive teacher retirement. 40,000.00/year joint

Haven't heard of secure act, will check it out.

I am 55 till November if that helps.

Reply
dlzallestaxes@msn.com
(@dlzallestaxesmsn-com)
Joined: 7 months ago

Illustrious Member
Posts: 26

Between 59 1/2 and 72, you should probably consider taking distributions from your IRA in the 12% tax bracket, and possibly even in the 22-24% tax bracket. Whatever is left after both you and your wife die, the adult children or other beneficiaries (other than grandchildren, or great-grand children under 18. or up to 26 if still pursuing "specified courses of education" probably for post-graduate degrees) will be required to distribute the balance at any time WITHIN 10 YEARS, not necessarily equally over 10 years. 

Do not delay getting professional advice on your significant financial situation. Good luck finding someone who understands it.

Reply
chop chop
(@chop-chop)
Joined: 1 week ago

Eminent Member
Posts: 3

Yeh, Im in a small town in North Dakota (I'll do some more looking) and both kids have their " stuff " together and well on their way.

Reply
Share: