72T / IRA distribution
L1: 72T / IRA distributionI’ve been taking a 72T SEPP distribution for over eight years now. I will be turning 59-1/2 next month, April 2012. As of April, I will have fulfilled both time and age requirements for a 72T. Since my 59-1/2 age was the longer of the two, will it be permissable for me to take a one-time additional distribution in May 2012 and have that subject to only normal Federal and State taxes, and avoid penalties?
Thanks for all answers.2012-03-22 16:47, By: rpmdbs, IP: [126.96.36.199]
L2: 72T / IRA distributionYes. Your 72t plan will end when you reach 59.5. After that day, you can take out any amount you wish to, and it will be taxable but not subject to penalty. You will get a separate 1099R for distributions after you reach 59.5, as the Box 7 code changes to 7 (normal distribution).
Prior to 59.5 this year, you have choices:
1) Take out nothing
2) Take out 3 months worth (although 4 will likely be OK)
3) Take out your full annual amount
2012-03-22 17:12, By: Alan S, IP: [188.8.131.52]