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72t & Immediate Annuities

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ByCW

L1: 72t & Immediate AnnuitiesDoes an immediate annuity satisfy the 72t requirements if it is for a 7 year certain term? The life expectancy of the person is 31.2 years, the amount of money required to reach the level of distribution needed is only 1/3 of the total amount available. This calculator shows a need of about $340K to reach the distribution level and the annuity would only need about $113K.

Thanks2009-01-09 16:39, By: CW, IP: [216.81.241.130]

L2: 72t & Immediate AnnuitiesUnfortunately the answer is NO. You would need to purchase a period certain annuity with a pay out period of 31.2 years.The plan as adopted must use one of the acceptable pay out methods – all of which are based on life expectancy.If a custodial account were set up for the $340k, then as part of the plan, $113k could be allocated to an immediate annuitywith the payments made back to the custodial IRA. Thedistributions to the owner under the SEPP plan would then be made from the IRA account.2009-01-09 16:59, By: Gfw, IP: [216.80.125.206]

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