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72t distribution vehicles

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Bytlc

L1: 72t distribution vehiclesCan an advisor set up an SPIA to generate the income needed for a 72t payment, say at age 52 an 8 yr SPIA, and place only the amount needed to generate that income in the SPIA (allowing for fed taxes and state taxes) and AVOID the 10% penalty?The balance of the IRA rollover would be in anIRA set to growth mode, not touching it for those 8 yrs.
tlc2008-09-12 11:11, By: tlc, IP: [70.233.230.39]

L2: 72t distribution vehiclesCan it be done… Yes. But, except to earn a few commission dollars, there is probably no reason to purchase a SPIA with interest rates as low as they are today.
Assuming the entire balance in the IRA is used to calculate the SEPP payment (not always the best idea), typically the SPIA would be then purchased bya Custodial IRA just like any other investment and the income would then be paid to the IRA and then re-distributed as a SEPP payment.
Also note, the SPIA payment is a fixed amount and has no relationship to either federal or state taxes. Any withholding would be done by the IRA Custodian2008-09-12 12:04, By: Gfw, IP: [216.80.125.206]

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