Can withdrawal amount be increased within the first year?

Sorry, but when you set up your PLAN, it has definite factors -- your age (which determines a "factor" called life expectancy), 120% of the applicable interest rate for either of the 2 months before you start, and the amount you SET ASIDE in the SEPP 72-T account. That determines your ANNUAL AMOUNT. You can also use the "REVERSE CALCULATOR" on this website to determine the "MAXIMUM AMOUNT" that you should include in your SEPP 72-T UNIVERSE. Then you keep any excess to establish later on if you need more money ANNUALLY.

Another aspect is you age when you start. If you are under 54 1/2, then you are locked into your PLAN until 59 1/2. If you are older than 54 1/2, then you are locked in for 60 months. You could establish plan 1 at the beginning of the year, and then set up plan 2 later in the year at whatever interest rate there is at that time. When you start plan 2 later in the year, you can take the full ANNUAL AMOUNT also in year 1, even if your start in Nov or Dec, or whenever you start in a later year. You can also consider taking a 2nd ANNUAL AMOUNT late in the year to give you an extra amount to have available to supplement needs over the next year or two. Of course, you need to look at your tax picture for the first year, and going forward.

Before you do anything more, please complete the "template" so we can give you a more informed response.

Thank you again - my template is on another thread, where you've already advised me on my overall plan.

Now I am just trying to figure out the best timing to maximize my withdrawal amount before I initiate the SEPP and have a specific question. The midterm AFR has been trending up so I want to wait to see if it goes higher, but I am also eager to make a withdrawal now.

Is it a violation to withdraw my current calculated max amount now AND - if the midterm AFR increases within this same year - make a second withdrawal of the difference of the new calculated max amount? That new max amount would then be my annual withdrawal amount for each subsequent year. If the rate doesn't go up, I would keep the original calculated max amount.

You are allowed to take withdrawals within the same year at whatever frequency you choose, correct?

The ANNUAL AMOUNT is calculated on the day of your first withdrawal. You take withdrawals totaling that ANNUAL AMOUNT in any frequency that you like, but the ANNUAL AMOUNT does not change after the day you start. If your ANNUAL AMOUNT on day one is $ 52,000, you can take $ 52,000 on day 1, or $ 1 on day 1 and $ 51,999 in Dec., or $ 1,000 a week, or $ 13,000 every 3 months, or $ 26,000 twice a year. It doesn't matter.

If you want to take a chance that the rates will go up, and you can take more per year, then split your IRAs in to 2 accounts, and start one in January, and when later in the year when you think you know when the rate is at its highest for the year. For example, if you have $ 1 million in your IRA, then start in January with $ 500,000 that you separate into your SEPP 72-T IRA account, and maybe that would allow you to withdraw $ 20,000 a year. Later in the year, set up a 2nd SEPP 72-T IRA account with $ 250,000 in it, and maybe the account values and the interest rates have both gone up, and the calculation allows another $ 10,000 per year. Finally, by Dec the value of the remaining IRA has $300,000 in it, and you take $ 12,500. So, you have taken a total of $ 42,500 in year one, and that will be the total for all future years. 

Compare this to having taken $ 40,000 if you had used only a single calculation at the beginning. Is it worth taking the chance that you can "time" when the interest rates have peaked, as well as the value of your portfolio also reaching its peak at the same time ? In my  example, your portfolio would have increased by $ 50,000 from $ 1 million to $ 1,050,000, and if you had guessed everything perfectly, you would have increased your ANNUAL AMOUNT by $ 2,500, because you would have locked in an ANNUAL AMOUNT of $ 40,000 initially without taking any chances on interest rates or the value of your IRAs.

On the other hand, you could take a different approach, and bust your plan at any time if interest rates and the value of your IRA go up drastically. Pay the 10% penalty for "early distribution" on whatever you had taken cumulatively, and then start over. In my example, if you started with a $ 40,000 annual amount that you withdrew on 3/31/2020, and by the end of the year your $ 1,000,000 SEPP IRA was worth $1.5 million, then pay the $ 4,000 penalty, and start a new SEPP 72-T plan for $ 60,000 a year.

Okay, I understand. Thank you for the idea about just paying the penalty if there is a significant change, that probably makes the most sense for me.

It is always best for people to use tax and financial planning professionals, especially when dealing with SEPP 72-T, NUA, and other non-standard tax and tax planning issues. 

This website is not really the place for extensive discussions of all of the aspects that I covered with you. However, hopefully yours might at least give others some ideas in the future to realize that there are alternative approaches that professionals can suggest for people to at least consider, or reasons why their initial approaches may not be the best approaches.

By the way, as you, and many others have discovered, unfortunately it is not easy to find tax professionals who understand these non-standard tax and tax planning issues, and the respective nuances. Most tax PREPARERS are not well-versed in these areas. As an aside, I just had a discussion with a CPA (tax preparer) who told me that she does not have any clients who have made 529 CONTRIBUTIONS for their children or grandchildren, let alone front-loading them with $ 75,000 per person per beneficiary, which can be done again every 5 years !!!!