72T questions

L1: 72T questionsI am 54 1/2 and am being offered enhanced early retirement (EER). I would be leaving the company before I am 55. All EER benefits would be added to the pension fund. After reading the information on this site, I still have some questions:
1. Except for a SEPP, are there any exceptions that would allow me to take a distribution of some of these funds before 59 1/2 without incurring the 10% penalty?
2. If I do set up an SEPP, does it have to be maintained for life? Or could it be “turned off” at some time?
3. How can withdrawal amounts be modified, in what time periods and to what extent?
4. What happens if at some future date the SEPP fund doesn’t have enough money in it to cover the payments? ie the balance goes to zero?
5. If I don’t touch the pension plan until age 59 1/2, are there any restrictions for withdrawals from the plan?
Thanks!
Clifford2005-08-07 07:41, By: cliffordcousa, IP: [15.238.95.37]

L2: 72T questionsHello Clifford:
1. Yes, particularly if you will turn 55 this year or can extend your employment into next year. Then, you could take advantage of the “Separation of Service At Age 55”. Using this exception, you can make whatever withdrawals you choose w/o penalty at anytime as long as the assets remain inside the company plan.
2. It can be turned off after the later of attaining age 59 1/2 or 5 full years of distributions.
3. See the discussion on switching to the RMD method.
4. Two things: (a) no more withdrawals as the account has zero in it; (2) SEPP plan ends without penalty.
5. No tax restrictions, however, there maybe plan restrictions.
TheBadger
wjstecker@wispertel.net
2005-08-07 16:53, By: TheBadger, IP: [66.250.23.21]