3 years into a 72T SEPP plan, considering changing to min dist.
L1: 3 years into a 72T SEPP plan, considering changing to min dist.
I started my SEPP in Dec 2008. I am considering changing it to minimum distribution this year. Do I use the original balance and interest rate I used to set up the original SEPP to calculate the minimum distribution or do I use current interest rates and
current IRA balance to calculate the minimum distribution? Also does that change the 5 year term or will the original end date of December of 2013 still apply?
2012-01-26 03:39, By: oldman99, IP: [220.127.116.11]
L2: 3 years into a 72T SEPP plan, considering changing to min dist.
You would use the balance as of 12/31/2011 and your age as of 12/31/2012. Each year going forward, you would use the previous 12/31 balance and your age at the end of the calculation year.
The Minimum distribution method does not use an interest rate.
2012-01-26 10:50, By: Gfw, IP: [18.104.22.168]
L3: 3 years into a 72T SEPP plan, considering changing to min dist.
Also, your plan will end on the same date it originally would have ended. The one time switch to RMD does not affect the plan modification date or the distribution options in the final calendar year.
Note that you can also change your calculation method from individual to joint or vice versa when you make the switch. Usually, individual is used for the fixed dollar methods because it produces a larger annual payment. But
when you make the switch you usually want to reduce your payment, so you might choose to use a joint calculation with your IRA beneficiary. However, be careful if you go to joint calculations that you use the oldest beneficiary if there is more than one and
make careful adjustments if you change beneficiaries. Finally, don’t use joint if you have a non individual beneficiary on the IRA, such as a charity. If you have any questions about this, post back or just stick to using the individual calculation.
2012-01-26 23:52, By: Alan S., IP: [22.214.171.124]