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Hello. First of all, thank you for continuing this site and making it so robust!
I just wanted to make sure my numbers are correct:
-
- Date of Birth: 6/12/67
- Age:52
- 72t Method: Amortization
- 72t Distribution Start Date: 02/01/2020
- Life Table Used: Single life
- Stub Year (Y/N):
- Annual Recalc (Y/N): No
- AFR Rate: 2.03% (January 2020 IRS Site)
- Account Balance(s): $ 468,546.65
My calculations show that an annual amount I am able to withdraw will be $19,920. I plan to take this until I'm 60.
Do you also get this amount?
I forgot to add that I'm using my year end statement 12/31/19 balance. I believe that is the stub year?
I agree that 2020 CAN BE a stub year at 11/12 of the ANNUAL DISTRIBUTION, or you can take 100% of the annual amount. It depends upon your tax situation, and cash flow needs.
Manually computing the amount using the amortization formula , I get the annual amount to be $19,919.51 rounded to the nearest cent. 2020 will be a stub year, so you can either withdraw the full annual amount or a prorated amount for 2020 of of $18,259.55 (11/12 of the annual amount).
If you decide to withdraw monthly instead of annual, the amount would be fixed at $1,659.96 per month (1/12 of the annual amount) beginning 02/01/2020.
Earliest potential modification date is 12/13/2026 (age 59 1/2 attainment).
Thank you for the quick responses. Could you confirm that if I used 2.0% instead of 2.03% that is allowed? I believe it is because it is lower than January's AFR rate of 2.03%. As an aside, we did a previous 72t last year on another account, so this new one will be used for additional living expenses so if we clear $19,000 from this account, we will be great. We have additional accounts for emergencies as well as another separate IRA.
The only restriction that exists is that the interest rate you choose may not exceed 120% of the applicable federal mid term rate for either the month payments start, or any of the two prior months. Since 2.0% is less than the 2.03% Mid term rate, you can use it.
