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- Date of Birth:
- 72t Method:
- 72t Distribution Start Date:
- Life Table Used:
- Stub Year (Y/N):
- Annual Recalc (Y/N):
- AFR Rate:
- Account Balance(s):
- Date of Birth: 06/16/1971
- Age: 48
- 72t Method: Amortization Method
- 72t Distribution Start Date: Oct 10, 2019
- Life Table Used: Single expectancy
- Stub Year (Y/N): N
- Annual Recalc (Y/N): N
- AFR Rate: 2.5 % (July 2019 rate)
- Account Balance(s): 885,000
Questions: Have calculated SEPP using amortization method using my 401K account with single expectancy (36 factor from IRS table), with AFR rate of 2.5% and investment rate of 4%, the distribution amount is $37,569.65 and would like to start distribution this year Oct 10, 2019 to last 11 years? Please check if my calculation are correct?
Need to ask about using distribution from 401k savings plan while applying SEPP 72(t) rule with Amortization method, as we are asked to complete Vanguard "Installment payment request" form. As Vanguard agents insist on using life expectancy (single or joint) ONLY to avoid 10% penalty and asking me to file IRS form 1099R (box 1 will be checked not 2) and in addition Form 5329 (to report retirement income) on my tax filing if I were to avoid 10% penalty? However, the IRS table for single expectancy they are using generates lower yearly payment cause they are not using the applicable federal interest rate? What are they missing and how can we make sure I elect correct method to setup correct withdrawal/distribution once to avoid the 10% penalty as per SEPP 72(t) rule from my 401K account? The three options form provide are 1) fixed amount, 2) declining balance (with number of payments years) and 3) life expectancy (which I have been forced to pick). My hunch is that they are calculating the SEPP amortization method wrong (and using Minimum distribution Method instead) while not considering the interest rate factor besides single life expectancy? Please advise
Thanks I recalculated with August rate of 2.24% coming out to be $36,073.36. I already have allocated separate IRA and Roth IRA (post tax) for rainy days. Yes I will be 12% tax bracket hence full amount is what I am looking for, can you also comment on the Vanguard form selection of single life expectancy they are getting lower amount close to $24000? Do you have formula how to calculate the amortization method with interest rate?
Should I calculate myself and pick fixed amount of the vanguard form? As Vanguard mentions only way a 10% penalty is avoided is by picking single expectancy, I am schedule to talk to a CPA but not many knows about 72t rule in general?