L1: 2002-62First of all, thanks for the great website. I’ve found it to be very helpful. Hopefully you can help me with a bit of a stalemate I’m in. I began taking distributions from my SEPP in January 1999 based on the amortization method. I am planning on changing my distribution to the RMD method but two financial planners have told me two different things. One says you must do it in the month you first began taking the distributions (January – in my case). The other says you can do it whenever you want. What is your understanding? Thanks again!2009-08-16 13:07, By: CTL, IP: [188.8.131.52]
L2: 2002-62Here is the wording from 2002-62…
(b) One-time change to required minimum distribution method. An individual who begins distributions in a year using either the fixed amortization method or the fixed annuitization method may in any subsequent year switch to the required minimum distribution method to determine the payment for the year of the switch and all subsequent years and the change in method will not be treated as a modification within the meaning of 72(t)(4). Once a change is made under this paragraph, the required minimum distribution method must be followed in all subsequent years. Any subsequent change will be a modification for purposes of 72(t)(4).
General rule of thumb is that if you calculated the Minimum Distribution [MD] using the appropriate age and balance of 12/31 of the previous year and you have already distributed more than that amount in the current year, wait until next year to make the change. If you have taken less of if you can use the 60 day rollover to end up with distributions that are less than the calculated MD, you can make the change in the current year.
2009-08-16 13:18, By: Gfw, IP: [184.108.40.206]
L3: 2002-62Give us your figures so we can help you.
1. Date of birth
2. Annual distribution amount.
3. Distributions already in 2009
4. Balance in applicable SEPP 72-T accounts as of 12/31/2008.2009-08-16 21:37, By: dlzallestaxes, IP: [220.127.116.11]
L4: 2002-62As follow-up question to this e-mail, I would like to reducemy annual distribution by changing from the fixed amortization to the RMD method. Started distribtions in 8/99 (DOB: 9/20/51). At this point, I believe the change would have to be made in Jan. 10 based on 12/31/09 balance. Please advise comments
2009-08-19 16:59, By: riles, IP: [18.104.22.168]
I would have to make the change starting in January 2010, based on 12/31/09 balance. I believe I have already taken more than would be calculated under the new method for ’09. Thanks – Riles
Thanks – Riles
on 2009-08-19 17:08, By: Riles, IP: [22.214.171.124]
L6: 2002-62CORRECT.2009-08-19 19:00, By: dlzallestaxes, IP: [126.96.36.199]