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Determining final distribution year
Date of Birth: 01/30/1967
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
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,
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,
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).