72t and Bank Cd”s
L1: 72t and Bank Cd”sDear 72T,
Can a 72T be established at a Bank, using Bank CD (s), and an IRA Money Market account,all being part ofthe 72T Universe? Monthly Interest from the CD (s) would flow into the IRA MM account and annual distributions would be made from the MM account.
2008-04-14 05:46, By: car-tows, IP: [22.214.171.124]
L2: 72t and Bank Cd”sHello Bob:
Short answer: YES
Longer answwer: You would need to open an IRA at the bank and purchase the CDs within that IRA. However, I would suggest that since you want to hold other cash balances in a MMA (usually found at brokerages) that you might be able to purchase just as good a CD through the brokerage IRA account as most brokerages are somehow coupled up with a bank / trust company and now also offer CDs.
2008-04-14 18:18, By: TheBadger, IP: [126.96.36.199]
L2: 72t and Bank Cd”sAs The Badger has stated – that”s exactly how I structured my SEPP… withone brokerage account containing mutual funds, brokered CDs,individual bondsand a money market account. Some of my CDs are in the exact annual amount I need and all interest goes into my money market account. I”m in my third year and it has worked beautifully. I don”t have to sell any mutual funds to make up my withdrawal.
My annual withdrawal goes straight into my taxable money market account in the bank where my personalchecking account is held and I budgetaccordingly.
Best of luck.
Cheri2008-04-15 16:03, By: Cheri, IP: [188.8.131.52]
L2: 72t and Bank Cd”sImplied, but not stated, is the fact that if you use your approach, you must amke sure that the INTEREST on the CDs is greater than the annual withdrawals required under your SEPP 72-T calculation, plus any annual fees charged by the bank or brokerage firm.2008-04-16 21:26, By: dlzallestaxes, IP: [184.108.40.206]