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Determining final distribution year  


twilliam
Posts: 3
(@twilliam)
Eminent Member
Joined: 1 month ago

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

3 Replies
twilliam
Posts: 3
(@twilliam)
Eminent Member
Joined: 1 month ago

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

Reply
steltek
Posts: 9
(@steltek)
Trusted Member
Joined: 8 months ago

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).

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1 Reply
twilliam
(@twilliam)
Joined: 1 month ago

Eminent Member
Posts: 3

Steltek, thanks for taking the time to reply to my post.

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