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.
BEFORE POSTING: Use this TEMPLATE when submitting a new post. Make sure you understand all terms used in the template and double check your answers before submitting your question. Carefully review the SEPP Planning Pointers and materials under the Tools and Resources menu (IRS Resources, Glossary, and Applicable Federal Rate table) before posting to make sure your question is clear and the answer you receive is accurate.
Subscribe to posts or edit your subscriptions by clicking on this link https://72tnet.com/community/subscriptions/ .
PLEASE NOTE: To avoid confusion, please do not add your question to someone else’s thread. If you have a question, please create your own post.
Date of Birth: 01/30/1967
Age: 52
72t Method: Amortization
72t Distribution Start Date: 07/12/2019
Life Table Used: Single
Stub Year (Y/N): N
Annual Recalc (Y/N): N
AFR Rate: 2.5
Hello,
My question concerns the year I turn 59 1/2. I took my first distribution in July 2019 as an annual distribution and I am taking 1 annual distribution for the life of my SEPP plan. Based on my distribution start date of July 12, 2019, do I need to take a distribution in the year I turn 59 1/2? I will turn 59 1/2 on July 30, 2027. I will have taken 8 annual distributions up to this point. Will I bust my plan if I don't take the final distribution in 2027?
Thanks for your help,
- TWilliam
Correction to my post:
I will turn 59 1/2 on July 30 2026. Do I need to take an annual distribution in 2026, which is the year I turn 59 1/2.
Sorry for the confusion,
-TWilliam
Your plan ends 07/31/2026.
I think you have the choice to take a full annual distribution, a prorated one equal to 1/2 the annual distribution (6/12ths representing the 6 months you were under 59 1/2), or no distribution at all.
If you take a distribution prior to 07/31/2026 and then any type of distributions after that date, you ought to receive two 1099 forms (one for the pre-59 1/2 distributions and a second for post-59 1/2 distributions because the coding for post-59 1/2 would change to '7' for tax purposes).
