5 year rule – need payment tax year six?
L1: 5 year rule – need payment tax year six?This is an existing SEPP, thefirst payment date was11/9/2010. my birthday is5/26/55. I was 59 1/2 on 11/26/14. I have made 5 annual payments in 2010, 11, 12, 13 and 14.my first modification date is 11/10/15 and I planto end my SEPP at that time. Do I need to take a payment in 2015. 2015-04-12 01:44, By: mdcky, IP: [22.214.171.124]
L2: 5 year rule – need payment tax year six?Because you’ve turned 59.5 prior to the 5th anniversary you have what is termed a 5 year plan. With this type you are only allowed 60 months, or 5 annual payments during this term. If you already meet this caveat then you cannot take a withdrawal until after the plan expiration on 11/9/2015.2015-04-12 02:21, By: Scott, IP: [126.96.36.199]
L3: 5 year rule – need payment tax year six?There is a common misconception or confusion. SEPP 72-T is a 5-year, 60 month plan at a minimum. The fact that someone takes 5 annual distributions at the beginning of each year does not mean that the plan ends at the end of 49 months.
The plan will terminate at the later of 60 months or age 59 1/2.
Since you have taken 5 annual distributions in the first 60 months, your next annual distribution would not be until 11/10/2015. Since you will be 59 1/2 as of that date, you are not required to take a distribution in 2015. If you decide to take one, however, it must be after 11/9/2015. You cash situation and tax situation should be considered at that time.
2015-04-12 03:52, By: dlzallestaxes, IP: [188.8.131.52]
L4: 5 year rule – need payment tax year six?Thanks, I thought that i might have to take a distribution every year the plan was active and i was afraid that if i did not take one in 2015 that it would be considered a modification.
I do not want to take a 2015 distribution if i don’t have to.
I’ve made it this far and i don’t want to screw up now.
So it sounds like you are saying that you can not take more than 5 annual distributions in the 60 month plan period or that’s a modification. Does that sound right?
Anyway, i’m not going to take a 2015 distribution and as long as i don’t make any more distributions until after the plan ends on nov 9, 2015 then i’m out of the plan and back to a normal ira rules.2015-04-13 01:21, By: mdcky, IP: [184.108.40.206]