72t and 59 1/2 obtainment

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L1: 72t and 59 1/2 obtainmentI will reach 59 1/2 the end of February. I have been taking a 72t distribution for over 5 years. I currently take it monthly, but due to the economy I need to take additional dollars out in January. The distribution total for the period prior to 59 1/2 would be way less than my 72t amount, but I can not find on the irs site what the rules are or can not figure it out. I would prefer not to change the 72t distribution since I will need to continue it after March anyway, plus I changed the way (not the amount) it was several years ago. Does anyone know what would happen if I take a lump sum out in Januarystaying below my 72t amount or should I ask if I could do that? Thanks2009-12-03 18:36, By: Nettyjet, IP: []
L2: 72t and 59 1/2 obtainmentStart by entering your information in our First Modification Date calculator at http://72t.net/FirstModificatonDateIf you are beyond the are 59.5 and the 5 years (the calculator will tell you – First Payment Modification Date), you have no problem. If not and uyou take out more than the scheduled amount, you will bust the plan. 2009-12-03 18:48, By: Gfw, IP: []

L3: 72t and 59 1/2 obtainmentI started the distibution in 2001 and had checked already to be sure I was good on the date. I thought I could do the withdrawal as long as I did not go over the amount, but wanted to see if anyone had problems with it. I did learn that I need to contact the company doing the withdrawal about the change on tax code for after March. Thanks for your help.2009-12-03 19:03, By: Nettyjet, IP: []

L4: 72t and 59 1/2 obtainmentNetjetty,The Last Pmnt Date calculator for people in your circumstances.. having taken more than 5 years of payments before reaching age 59 1/2 is basically the same, in that you can start modifying the plan one day after you turn 59 1/2. Since you said that is late Feb 2010, I would not recommend an odd amount being withdrawn in January, at this late date, since you are still subject to the 10% penalty on whole SEPP plan if they rule that you shd not have taken that payment. I would recommend continuing the monthly SEPP pmnts for JAN and FEB, and planning to take a larger withdrawalafter turning 59 1/2, but I am very cautious.The discussions I have seen at times on this site in the past about that final year for people who already took at least 5 years of payments had some saying thatyou could skip those last two monthly payments (in Jan and Feb of 2010) as I recall, but I have never seen anyone suggest that you could take an odd amount in final year prior to attaining age 59 1/2, other than perhaps taking the entire year of 2010 SEPP payment (basically switching to annual payment planwith your custodian for the year 2010, and asking it to be paid in January).Then, after end of Feb 2010, you could alsotake other moneyout if needed, once past age 59 1/2. That may be a possibility. KEN2009-12-03 19:44, By: Ken, IP: []

L5: 72t and 59 1/2 obtainmentKen is correct. Your options for 2010 PRIOR to the modification date:1) Most conservative: take out the Jan installment only (1/12 the annual)2) OK but less conservative: Take outnothing because you have already taken out at least 5 years worth.3) OK but less conservative: Take out the full annual amountAnything in between those numbers will bust the plan. I suspect many people have taken out 2 months worth in this situation and the IRS has not bothered them, but technically, the month of modification should not count for pro rating purposes, only complete months. The ending month means no distribution is called for in that month unless it brings your total up to the full annual amount.2009-12-04 02:56, By: Alan S., IP: []