401k rollover to IRA after SEPP

L1: 401k rollover to IRA after SEPPLeft employer at age 49 and began receiving SEPPs from the 401k. Now 54 and would like to rollover the account balance to an IRA and continue the same SEPPs. Would this be considered a modification and bust the 72t? Also, please note that PLR 9221052 clearly allows this for terminated plans. However, a close reading doesn”t seem to indicate that it matters whether or not the plan is terminated.2007-02-13 07:16, By: Jack, IP: [75.31.156.97]
L2: 401k rollover to IRA after SEPPHello Jack:
Whether the plan is terminated or not is irrelevant. You may transfer from the 401(k) plan to an IRA without busting your SEPP plan. I would recommend that you do this via a trustee-to-trustee transfer (as opposed to a rollover) such that you can elect that no taxes be withheld from the distribution from the 401(k) account.
TheBadger
wjstecker@wispertel.net
2007-02-13 07:43, By: TheBadger, IP: [72.42.67.187]

L2: 401k rollover to IRA after SEPPThanks, however I didn”t realize I could do a trustee to trustee transfer from a 401k to an IRA. Does this mean the 1099R wouldn”t be coded as all taxable?2007-02-13 07:56, By: Jack, IP: [75.31.156.97]

L2: 401k rollover to IRA after SEPPJack:
Definitely use the “trustee-to-trustee” transfer from the K-plan to the new IRA. The normal process is that you set up a “dry” IRA account at the preferred custodian, and then get a distribution package from your former employer”s HR department. There will be forms for you to completetelling the K-plan custodian the name, address and account number for the new IRA, and they”ll send a check either directly to the new custodian or to you but made payable to the new IRA. As long as the check isn”t made payable to you, everything is OK. If you check the wrong box and they send a check directly to you and it”s payable to you, then they withhold the mandatory 20% and you have a real bucked of worms.
Trustee-to-trustee transfers don”t generate a 1099-R.
Do this process early in the year … now would be a good time to get started … so you don”t run out of year before all aspects of the transfer are completed.
Good luck.
Jim2007-02-13 08:19, By: Jim, IP: [70.184.2.72]

L2: 401k rollover to IRA after SEPPhello-how is a partial distribution handled? i intend to rollover this year (am disabled and turn 55 in December 2007). Can i take say, $30,000 out at the time of rollover and rollover the rest without penalty? does my employer withhold the 20% on the $30,000 only?thanks for your help!2007-02-13 08:58, By: safford, IP: [24.235.224.206]

L2: 401k rollover to IRA after SEPPIf you are disabled in accordance with the provisions of the exceptions to the 10% penalty for early withdrawals, then DO NOT rollover into any SEPP. Just take whatever distributions you want or need from your 401-k or IRA (non-SEPP). Disability is a code 3 exception.2007-02-13 21:23, By: dlzallestaxes, IP: [4.175.9.248]

L2: 401k rollover to IRA after SEPPDLZ:
If someone has qualified for a Code 3 “Disability” exception, why would it matter whether the money is left in the K-plan? Wouldn”t the exception apply to both qualified plans and IRA”s? If distributions are made to the individual from the qualified plan, isn”t the plan custodian required to withhold the 20% for taxes regardless of penalty exception status?
I”m thinking it may be advantageous to process an IRA Rollover to an IRA for various reasons like, better investment choices; lower required tax withholding requirements (0% to X% as the participant needs); and maybe the qualified plan isn”t “friendly” as to available distribution options.
If mysecond question is answered in the “affirmative,” then I agree with you that setting up a SEPP after the transfer is not required.
Jim2007-02-14 07:33, By: Jim, IP: [70.184.2.72]

L2: 401k rollover to IRA after SEPPWe had a “moving target” here. It wasn”t until several responses that we determined that he was now disabled. I agree thatinvestment choices in IRAs are better than in 401-Ks. I was just suggesting that he not rollover the “BALANCE” in his 401-K SEPP to an IRA SEPP (which is different from a “SEP IRA”) because he probably qualifies for exception 3. No sense confusing the trustee/administrator/custodian/broker who probably doesn”t under SEPPs or exceptions. All distributions since he qualified for the disability exception should have been coded 3. But that doesn”t matter as long as he followed his SEPP plan.2007-02-14 12:12, By: dlzallestaxes, IP: [4.175.9.75]