72(t) and age 59 1/2

L1: 72(t) and age 59 1/2I understand that you must continue the SEPP until age 59 1/2 or 5 years. But if youhave received monthly distributions forlonger than 5 years and turn age 59 1/2 during mid year of the distributions. Are you required to take the full annual SEPP calculation or can you just stop the monthly distribution once you turn age 59 1/2 ?
Cory2007-12-19 09:02, By: Cory, IP: [71.195.228.29]

L2: 72(t) and age 59 1/2Hello Cory:
On the presumption that you have taken 60 or more monthly distributions and the 5 years as measured from the date of your 1st distribution has equalled or surpassed 1828 days; then your plan ends on your 59 1/2 birthday (again age 59 plus 183 days). The next day you are free to continue / discontinue / alter your distributions as you see fit.

TheBadger
wjstecker@wispertel.net
2007-12-19 15:48, By: TheBadger, IP: [72.42.66.180]

L2: 72(t) and age 59 1/2Badger :
Taking this question into a related aspect, if in the initial year you take a prorated amount of the annual calculated distribution, then in the final year you must take the balance of the annual amount not taken that first year, prior to the 59 1/2 or 5-year point.
However, if you took an entire annual distribution in the first year for a plan starting in any month other than January, let”s say in December, then it is the number of days/months that constitute the 5 years, not the distribution of 5 annual distributions, which technically could have been taken over a 38 month period ( Dec, then 3 years, and finally Jan). But the SEPP 72-T must continue at least until 5 years (60 months) after the month of the first distribution, regardless of that first amount.
Correct ?2007-12-19 20:47, By: dlzallestaxes, IP: [141.152.248.162]

L2: 72(t) and age 59 1/2Easy way to look at it is that the plan start date is measured from the date of the first distribution and will last at a minimum of 1,828 days.
The months that separate the first and last payment is not really material as long as there are 60 monthly payments, five annual payments, etc.- the total amount distributedmust equal5 annual payments.2007-12-20 04:17, By: Gfw, IP: [216.80.125.206]

L2: 72(t) and age 59 1/2GFW — There are 2 different issues here. If the minimum between the first distribution date and last date is 1,828 days, then it is immaterial how the payments are made, so long as they total 5 annual distributions. But if the critical factor is the distribution of 5 annual distributions in 5 different calendar years, then this can be accomplished over a 38 month period. I was trying to clarify if the latter (38 month) scenario is viable for someone starting in Dec, or if the 1,828 days was the ultimate controlling factor.2007-12-20 09:31, By: dlzallestaxes, IP: [151.197.226.227]

L2: 72(t) and age 59 1/2The 1828 days would be the controling factor – seperate from the distributions, the plan may not be alterered during that period – no additional distributions or additions to the SEPP account.
The payments may have been made, but the plan is alive and well untillast day.2007-12-20 12:16, By: Gfw, IP: [216.80.125.206]