72(t) payment mode change
L1: 72(t) payment mode changeIf I start my 72(t) withdrawals as a monthly payment, can I change the monthly payment (during the year) to the remainder of the annual amount (9 months worth) and then start the monthly payments again beginning in 9 months? I want to advance the monthly payments so I can move my investment to a better interest rate product with less risk. Is that possible to do without creating a modification?2009-03-23 21:44, By: Mr. Annuity, IP: [18.104.22.168]
L2: 72(t) payment mode changeYes, the annual distributed amount is the only amount that matters here, and you are on a calendar year plan. You could take out the annual amount in January as a lump sum if you wanted to, or as monthly payments for 6 months and quarterly for the last two quarters.
In addition, if 2009 is your first distribution year and your first payment is in April, you have a choice of distributing 75% of your annual amount or 100% between April and the end of 2009. You do not have to make that final decision until December. For example, you could take out 75% in April, and in December decide if you want to take the other 25% or not. You cannot elect some amount in between 75% and 100%.
Double check your annual distributions to date every December while you still have a chance to make final corrections. If you are on a monthly schedule, make it early in the month, so there is time to make corrections in the final month if need be.
2009-03-23 22:19, By: Alan S., IP: [22.214.171.124]
L3: 72(t) payment mode changeThe distribution has been in force for 3 years next month. My client wants to exelerate 9 more months of payments (has alread received 3 months) and then start the monthly payments again next April. He is stating that he can do that without creating a modification. Is that correct?2009-03-23 22:26, By: Mr. Annuity, IP: [126.96.36.199]
L4: 72(t) payment mode changeHe can only accelerate payments to the extent of his calendar year distribution. If he has taken out 25% of his annual distribution so far, he can take out the other 75% right away or split it over the next 9 months any way he wants. But he cannot accelerate into next year’s distribution (2010). Just think calendar year, not April to April for determining the exact annual amount that must be distributed.
Next January startsa new calendar year, and he can structure his 2010 annual distribution any way he chooses. This includes taking nothing out until April if he wishes.
2009-03-24 01:24, By: Alan S., IP: [188.8.131.52]
L5: 72(t) payment mode changeThank you.2009-03-24 01:30, By: Mr. Annuity, IP: [184.108.40.206]