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Please confirm  


Retired Fisher
Posts: 4
(@retired-fisher)
Eminent Member
Joined: 8 months ago

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? 

7 Replies
Retired Fisher
Posts: 4
(@retired-fisher)
Eminent Member
Joined: 8 months ago

I forgot to add that I'm using my year end statement 12/31/19 balance.  I believe that is the stub year? 

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1 Reply
dlzallestaxes@msn.com
(@dlzallestaxesmsn-com)
Joined: 7 months ago

Illustrious Member
Posts: 26

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.

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

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).

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Retired Fisher
Posts: 4
(@retired-fisher)
Eminent Member
Joined: 8 months ago

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.  

 

 

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3 Replies
steltek
(@steltek)
Joined: 8 months ago

Trusted Member
Posts: 9

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.

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Retired Fisher
(@retired-fisher)
Joined: 8 months ago

Eminent Member
Posts: 4

Thank you! 

 

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steltek
(@steltek)
Joined: 8 months ago

Trusted Member
Posts: 9

Any time.

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