72t distribution schedule

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L1: 72t distribution scheduleGreat info on yourwebsite – thanks for sharing it! I’m now 54 1/2 years old and am thinking about starting a 72t sepp this October. According to your calculator, a $500k IRA balance at the max rate of 2.62% for plans beginning by 10/31/10 would yield $24,010 in annual distributions under the amortization method. My question is, can I take an initial $24,010 lump sum annual distribution when I start the sepp plan in October 2010, then resume distributions at $2,000.83 monthly (totaling the same $24.010 annual amount) beginning January 2011 and continuing each month until the sepp plan terminates after 5 years in October 2015?Is the distribution schedule(annual lump sum vs. monthly equivalent) irrelevant for sepp compliance purposes, as long as it equals the total required annual payout for the plan’s required duration? In my particular case, the sepp plan would be starting late in the calendar year. If I could take the initial $24,010 annual distribution via lump sum in October 2010, then begin receiving $2,000.83 monthly in January 2011, that would provide more “up-front” cash, as opposed to just taking equal monthly $2000.83 distributions when the plan begins. Thanks for the guidance!2010-08-30 18:16, By: Bill, IP: []
L2: 72t distribution scheduleYou may make distributions as you have described. Take the full annual amount as you first distribution in October and then begin monthly distributions in January, 2011. Just note the date of the first distribution as that will bethe “Start Date” for the plan and will dictate when you can officially “End” your plan.
Jim2010-08-30 18:22, By: Jim, IP: []

L3: 72t distribution scheduleIf you elect to distribute your full annual SEPP payment this year, you will have the max number of options in 2015, which is your final stub year. You will be able to distribute prior to your modification date:
1) Nothing prior to your modification date since you will already have distributed 60 months worth
2) 9 monthly payments ending in Sept, 2015 or other pattern that totals 75% of your annual distribution
3) Your entire annual distribution
Of course, you have plenty of time to make that decision, but if you took out only 3 months this year, Option 1 above would be eliminated. The point is that taking this money up front does not mean that you will be forced to take out a larger total over the life of the plan. 2010-08-30 19:35, By: Alan S., IP: []