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72t distribution

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ByMarc

L1: 72t distributionI don’t understand the difference between the reasonable interest rate and the actual investment rate. Please explain?Why do you have an IRS penality interest rate on the calculator?Thanks,Marc Silverman,2002-07-01 16:39, By: marc, IP: [127.0.0.1]
L2: 72t distributionThe reasonable interest rate is the rate used to calculate the SEPP payment. The default for the calculator is 120% of the AFR – see the interest rate link on the left menu.The investment rate is the rate at which underlying assets are invested and may have no relationship to the reasonable rate – that’s exactly whay so many SEPP plans are finding themselves running out of assets.The IRS penalty rate is for estimating the interest due if the plan goes “bust” – you would owe 10% of prevoius distributions plus interest on the past due penalties.These explanations are also available by pressing the [HELP] button on the calculator.If you need additional clarification, please let me know.2002-07-01 16:47, By: Gfw, IP: [127.0.0.1]

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