72t distribution rules
L1: 72t distribution rulesI’m 56 year old. If I start a 72t distribution from my IRA now, it must go the next 5 years. When I turn 59 1/2, can I take out more from my IRAthan 72t calculated amount?
Another question, under the same 72t distribution starting at age 56, can I still take out more than the 72t calculated amount say one year later to help pay for higher education expense?
2009-06-09 16:42, By: Ed, IP: [188.8.131.52]
L2: 72t distribution rulesWe recommend that you use the minimum amount possible from your IRA account(s) to satisfy the calculated cash needs over the next few or 5 years from your SEPP 72-T. The rest of the IRA balances should be transferred to a separate IRA account(s) for use in case of future emergency needs.
You could take higher Education distributions from the non-SEPP IRA accounts without the 10% penalty for early distributions before 59 1/2.
Based upon the recent BENZ case, if you do not have separate non-SEPP IRA acounts, you are allowed to take distributions for higher Education in adition to your SEPP distributions without “busting” your SEPP 72-T plan.2009-06-09 17:36, By: dlzallestaxes, IP: [184.108.40.206]
L3: 72t distribution rulesdlz makes a good point about the extra distribution for higher education.
However, if it were me, I might wait until there is another ‘favorable’ Benz case or it becomes more clear on how the IRS will respond in the future – I wouldn’t want to be the next test case.2009-06-09 17:57, By: Gfw, IP: [220.127.116.11]
L4: 72t distribution rulesI agree with GFW, but I was citing the use of the Benz case ONLY if he was not able to set up a separate IRA account for future distributions outside of the SEPP 72-T.2009-06-09 18:10, By: dlzallestaxes, IP: [18.104.22.168]