I agree with Gryphon that you can take any distribution that is CALCULATED at 1/12, 2/12, 3/12, 4/12, or 6/12 in January. From Feb-Dec you can take an...

I believe that you misunderstand the 72t rules. You are correct that the 5-years aspect is based upon 5 year (i.e. 60 months). But, once you reach the...

@gryphon We agree. But, my point was that usually it may not make sense to reinvest the dividends within the IRA because either monthly, quarterly, se...

@gryphon Your answer also applies at Vanguard, American Funds, and all other mutual fund companies.

If you reinvest the dividends, then you will have to sell some investments before you make distributions. Cash will be needed not only for the distrib...

The distribution is based upon the value as of the date that you chose which is supposed to be "a reasonable valuation". This has been interpreted by ...

You only have to pay estimated taxes for income earned in the periods ended 3/31 (Paid 4/15), 5/31 (Paid 6/15), 9/15 (Paid 9/15), and finally 12/31 (P...

When taxpayers are employees, they have federal (and state) income taxes withheld from their paychecks, and remitted to the IRS (and state) by their e...

You should decide NOW whether you will have the federal income taxes withheld from every distribution, and remitted to the IRS by Vanguard, and the di...

Your tax bracket over the next 5 years vs after 59 1/2 would be a consideration. Also, whatever income and appreciation that happens WITHIN your IRA w...

You are correct, your question does not require the template. You really have to do a spreadsheet to determine what your taxable income might be unt...

The penalty for "busting your plan" are very severe. The requirement is to maintain the plan EXACTLY for the longer of 5 years or to age 59 1/2 (your ...

@gryphon GREAT IDEA. BTW, 99% of CPAs have no idea what a 72-T plan is, or how it works. (Same re NUAs -- "Net Unrealized Appreciation" pl...

I basically agree with gryphon's response, except that monthly or quarterly distributions spread out the cash flow needs for the portfolio to generate...

You are correct that this is the wording in IRS NOTICE 2022-6. I have contacted one of the authors of this notice from the IRS Office of Legal Counse...

You might have a problem. You have to use an IRA balance that is "reasonable", and must be within no more than 6 month's prior. You cannot use a balan...

YES. You can take any amount at any frequency, just so you do not take more than the $ 30,000 PROVIDED THAT IS THE CORRECT CALCULATED AMOUNT PER YEAR....

You don't have to take any more distributions in 2023. Your plan ends in March 2023, and you can do whatever you want after then. It will become a tax...

You don't even have to take 1/4 in Jan-Mar 2023 if you don't want to since you took a full distribution in March 2018.

I think it depends how you have been taking your distributions, as well as for 2022 and 2023. Many people confuse the requirements. You must take the ...

or shorter just "PENALTY FREE DISTRIBUTIONS BEFORE 59 1/2"

TAKE RETIREMENT DISTRIBUTIONS BEFORE 59 1/2, WITHOUT 10% PENALTY

I understand. You were asking about the payroll taxes for SS/FICA (6.2% to a maximum of $ 8,854 in 2021) and Medicare Tax (1.4% with no limit). As alr...

If that is where Christian is coming from, it is hard to believe that at $ 240,000 per year for his SEPP 72-T distributions minus say $ 40,000 in with...

I am confused by your comment "should I be budgeting for SS and Med as well as income tax out of the SEPP withdrawals?" At first I thought that you we...

You should be able to adjust the withholdings at any time. But, you would have to check that with the broker or financial institution. When you contac...

My only comment is that I would advise you to significantly increase your withholdings, rather than do quarterly estimates. You will be in the 24% tax...

It looks like you are "good to go" in accordance with "The Badger's" comprehensive e-mail.

I understand. Many companies have the same problem of HR not understanding the 401-K plans. They should be forwarding queries to the 401-K administrat...

Some companies will allow you to keep your 401-K with them even after you leave the company. Not all companies allow 401_K rollovers into their pla...

NO. DO NOT ROLLOVER YOUR 401-K TO AN IRA. THE RULE OF 55 (AND NUA) APPLY ONLY TO 401-K PLANS. IT DOES NOT APPLY TO IRAs !!!!!! If you roll over your...

You were right. It is the age when the first distribution is made. I was confusing it with the RMD rules.

You missed the following wording above the chart. I think we should put this in bold caps so people don't miss it. (Sorry for the confusion.) "January...

I suggest that you meet with an experienced tax, retirement, and/or financial advisor to work with you in developing a spreadsheet analysis to develop...

Just a caveat. Bill's posting has to do with NEW SEPP 72-T plans starting in 2022 (or later), not for 2021 and previous plans that existed at 12/31/20...

That makes sense. However, there is nothing stopping you from including BOTH IRA accounts in your SEPP 72-T UNIVERSE. So, in your example, you can sti...

We are good. The new regs do not affect prior plans, except for RMD plans. The amortization or annuitization methods are affected only for new plans...

@tracy This is true, but I have always believed that SEPP 72-T plans are usually used, and should probably only be used, as a means to supplement curr...

Further, in some situations, such as SEPP plans set up in late 2021, it might be an opportunity to bust those plans at lower interest rates, pay the 1...

@grege -- I went back to your initial posting, and I see that you did say "if we're now allowed to establish a SEPP". YES. The key word is "establish"...

That is correct. The new 2022 Tables have a higher divisor, which means you get a lower Annual Distribution if the balance hasn't changed. Most balanc...

The new 2022 IRS Tables are mandatory only for NEW SEPP 72-T plans, and are not applicable to existing plans. On the other hand, for regular IRA distr...

Before everyone misunderstands this IRS Notice, I was able to get clarification. This "allows" NEW SEPP 72-T plans to use this in 2022, and "mandates"...

You are welcome. Often, the technical details of the SEPP 72-T process are not as important as the TAX PLANNING related to the entire Retirement Plann...

I am waiting for a clarification of pages 7, 8, & 9. In the wording of your posting, I don't understand how you can have a 5% floor "on the ...

I think it would be ideal to do ROTH CONVERSIONS for your wife's IRA on a planned approach of say $ 25,000 in 2022, 2023, and 2024 (balance including ...

You are correct in keeping the HSA for Medical Expenses. If you are fortunate enough to not need it in the next 10+ years, it can always be cashed in,...

It might be considered "tax fraud". "Ignorance of the law is not a valid defense." If caught, the penalty then would be 10% of all invalid distr...

#1 -- I guess that you could do that. You are right that no SEPP documents are sent to the IRS, and I guess that most brokers or mutual plans don't as...

Since it is now 2022, I don't think that you can do either # 1 or # 2 for the following reasons: #1 -- I think that the penalty for terminating ...

I am not sure what you mean by "OP". But, in answering you question, if you want to LOWER your ANNUAL amount, then you are allowed to use the new IRS ...

You are correct. You cannot use the rate for the current month. It must be the interest rate for either of the 2 PRIOR months. I don't know how you ca...

You can start your plan today under the 2021 IRS TABLE and take the distribution today for either the entire 2021 amount (100%), or 50% (6 months), 25...

If you click on the link above "APPLICABLE FEDERAL RATE TABLE", this is the following: This table contains the maximum Applicable Federal Rates (als...

If the initial DISTRIBUTION is in January 2022, then you can use EITHER the Nov or Dec 2021 rates. But, ALERT -- you must use the NEW IRS LIFE E...

The main issue to be careful to be aware of with annual distributions is that the paln does not end at the 5th distribution. It does not end until 60 ...

One important consideration is you taxable income for 2021 when you add either 1 month or 12 months of income to your other 2021 taxable income.

With the big sell-off on Friday, and possibly on Monday and Tuesday, just an alert that you do not have to use and end of month balance. I would print...

You will have to take distributions thru 2025 when you will be 58. In 2026 you will be 59 1/2 on 7/30/2026. Since you have been taking annual distribu...

In addition, because your kids will be taxed in at least the 22% tax bracket, and possibly 24%, these professionals recommend that you do ROTH CONVERS...

There are some conflicting ideas being thrown around. First, you must take at least 60 months' worth of distributions ("5 years"). Second, you cannot...

I think that if you wanted a higher SEPP Distribution figure, you could wait until after 1/31/2022 to start your SEPP 72-T plan, and use the higher ba...

Yes. But, under normal circumstances, IRA contributions must be made by the initial filing deadline of 4/15. In 2020 that deadline was deferred to 7/1...

Whenever one of you dies, the survivor will be in the 22% tax bracket as a SINGLE taxpayer. In addition, if both of you live until you start to collec...

Your low tax rate now and for the foreseeable future is exactly the reason to consider ROTH CONVERSIONS, if not now, then at least in 2 years when you...

I was about to respond that you used the wrong age. The age to use is the age that you will become by 12/31 of the year of your 1st distribution. Bu...

I didn't look at the IRS website, but you are correct that the new life expectancy tables were deferred from 1/12021 to 1/1/2022. In your posting, a...

Be careful. You can do only 1 ROLLOVER within a 12 month (not calendar year) period.

Read the information in the "2022 CHANGES" at the top. I believe that is unlikely that existing plans will be "grandfathered" and not ahve to change t...

GO TO THE TOP AREA WHICH HAS TOPICS LISTED WHITE/BLUE (I'm colorblind) ON BLACK. IN THE UPPER RIGHT CORNER IS A LINK FOR " 2022 CHANGES ". THIS HAS TH...

Everything is relative. If someone has $ 1 million, and can distribute $ 25,000 a year from say 50-59.5, and only pay the income tax, and not an addit...

You could also try to "time the market" by setting up an account with 25% of your money for the 1st plan, and setting aside 75%. Then at the end of 20...

The new "expectancy" tables were supposed to be effective as of 1/1/2021. But, because of the pandemic, the effective date was changed to 1/1/2022. Th...

I suggest that you give us your details if you want some informed responses. If you have very low taxable income, then the 10% penalty might be your o...

You didn't provide us with the template for your situation,, nor answer my various questions. So, we really cannot help you any more. If you want to ...

P.S. Fidelity or Vanguard do not usually care, and do not require any documentation, and surprisingly, neither does the IRS, unless they audit you for...

We would appreciate if you would start by completing the "TEMPLATE". That will provide us with the information needed to respond better than with gene...

By the way, as you, and many others have discovered, unfortunately it is not easy to find tax professionals who understand these non-standard tax and ...

It is always best for people to use tax and financial planning professionals, especially when dealing with SEPP 72-T, NUA, and other non-standard tax ...

The ANNUAL AMOUNT is calculated on the day of your first withdrawal. You take withdrawals totaling that ANNUAL AMOUNT in any frequency that you like, ...

Sorry, but when you set up your PLAN, it has definite factors -- your age (which determines a "factor" called life expectancy), 120% of the applicable...

At this point, it appears that taxpayers have 2 choices -- continue the same distributions, or they will be allowed to lower their annual distribution...

No, but I’d be surprised if they would REQUIRE people to recalculate EXISITING plans. I would think it would be more for new plans. The final regs sa...

The IRS did issue guidance when the CARES Act was passed. SEPP 72-T plans, like all IRA and 401-K/403-B plans MUST use he new Life Expectancy and Fact...

ROTH CONVERSIONS are an excellent tax planning, retirement planning, and Estate planning approach. I have my clients targeting conversions up to the l...

You are correct to first question. Technically, you can name which 401-K accounts are in your SEPP 401-K UNIVERSE of 401-K accounts. Similarly, you c...

NO. If he starts he SEPP in 2021, he must use the current life expectancy. For 2022 and future years, ALL life expectancies must be changed to the new...

Did you use the "reverse calculator" to determine the MAXIMUM amount hat you should put into your SEPP 72-T account to generate the $ 70- 75K that you...

I think that you misunderstand the "instructions". The balance to use for your FIRST YEAR (and all years if you don't "recalculate") is the balance at...

GREAT ANSWER !!!!

You are welcome. We went way beyond the scope of this website, and way beyond the expertise of most CPAs !!! (I was one of the 2% who passed the CPA e...

Charitable Remainder Trusts are primarily for people who are CHARITABLY ORIENTED, or are looking for the "annuity" that they provide for people in lat...

I rarely recommend whole life insurance, because most clients need the most coverage for the least dollars. However, "wealthy" people should look at w...

You are correct that you could be subject to penalties and interest. However, since the quarterly estimate dates are 4/15, 6/16, 9/15, and 1/15, your ...

You might consider having the taxes either withheld at the SEPP 72-T level, and have the taxes remitted by the broker. You could also increase your wi...

You should use the 'REVERSE CALCULATOR" on this website to determine the MAXIMUM AMOUNT that you need to put into your separate SEPP 72-T account tha...

I am not about to issue any opinion contrary to this professional analysis. However, I suggest waiting until later in 2021 to make any change in the S...

I have been doing this for many years, as has Alan and the developer of the original website. The SEPP 72-T is a tremendous provision (as well as NUA,...

Your interpretation is correct. The age 55 exception applies if you WILL turn 55 at any time before 12/31 of that year. You do not have to wait until ...

As you said, this is a complex situation. I will try to simplify it, but welcome others to agree or disagree. First, if I understand you correctly, yo...