2 IRAs -1 SEPP

L1: 2 IRAs -1 SEPPIs is possible to set up 1 IRA only used for Medical expenses thus avoiding a penalty and the other for an SEPP? Medical expenses are really high from retiring early! Haven’t done anything yet except rolling over a pension to an IRA. So could I split up this IRA into 2 IRAs and do the above? Thanks in advance!2002-04-08 07:42, By: Vicky, IP: [127.0.0.1]
L2: RE: 2 IRAs -1 SEPPYou could create two IRAs; one for a SEPP and a 2nd to handle medical expenses; however, in the typical situation this does not make sense. IRC 72(t)(2)(B) provides that IRA withdrawals for “qualifying medical expenses” are penalty free, but to be “qualifiying” those medical expenses are those that exceed 7.5% of your adjusted gross income. Thus, in most circumstance, one is simply better off with one larger IRA and correspondingly larger SEPP amount with a plan that a portion of the SEPP is to pay for those hefty medical insurance premiums. The best of both worlds is to have 2 IRAs, one from which the SEPP is made and a second IRA that is held in reserve (“dry powder” so to speak) and one of the contingencies that IRA #2 to can handle is unisured medical expense.TheBadger2002-04-08 07:53, By: TheBadger, IP: [127.0.0.1]