L1: 72t calculationIs it permitted to use a rate lower than 120% of the federal mid-term rate in calculating a SEPP?
We would like to take a withdrawal that is less than the amount shown by the 72t calculator. Is this allowed as long as we document the interest rate that is lower than 120% of the current federal mid-term rate? Our intent is to use a lower rate in order to have a more conservative withdrawal.2010-03-08 19:00, By: Robert, IP: [22.214.171.124]
L2: 72t calculationWe recommend a better approach. use the “reverse calculator” on this site to determine the amount of your IRA accounts to include in your “SEPP 72-T UNIVERSE” which will result in the amount you need in annual distributions. Transfer that amount, or the excess amount, to a separate IRA. By doing this, you provide an “emergency” fund to take additional distributions from, subject to a 10% penalty on only these extra amounts, without subjecting ALL CUMULATIVE DISTRIBUTIONS to the 10% penalty retroactively. If the extra need is somewhat permanent, then you can use part or all of these separate funds to start a 2nd SEPP 72-T, calculated in a way similar to setting up the first one.2010-03-08 19:10, By: dlzallestaxes, IP: [126.96.36.199]