72(t) Re start after taking a partial IRA early di

L1: 72(t) Re start after taking a partial IRA early diI have a self-directed IRA and I am currently taking the 72(t) monthly allowed distributions (since July 2007).I now wish to pull about 100,000. from my IRA account for personal use. I know about the 10% penalty tax and interest charges on monies already taken out.My question is: Can I restart the 72(t) payments recalculated on the new lower account balance? Are there any other things to be aware of and/or cautious about?2008-11-25 09:24, By: Mitch, IP: [71.34.243.97]
L2: 72(t) Re start after taking a partial IRA early diYes, once you bust a 72t plan, that particular plan is over and it is up to you whether you should start a new plan or not. SInce we are very close to year end here, you also need to decide which year you want the extra 100,000 taxed in so you can time the distribution.If you start a new plan, the 5 year period starts over and all your calculations, interest rate etc are based on your new start date. If you bust the prior plan this year, you would attach Form 5329 to your 2008 return and show the penalty for your 2007 and 2008 distributions @10%. The interest will not amount to much for the short time you owe it and the interest rates have recently been dropping.Now here is the warning. If you have already busted your first plan in just over one year, you obviously are going to have to do better planning for the next one and/or take a more conservative line on living costs, or the next plan will end up the same way. There are other strategies to use as well IF you have the retirement fund balance to support them:1) Start two separate plans the next time, at least a couple months apart from two different IRA accounts that you have partitioned from current accounts. These will be independent, so if you have to bust one of them the other will not be affected.2) Partition your IRAs such that you maintain one account outside your 72t plan that you can use for emergency needs. You will pay the penalty on distributions from that account, but your basic 72t plan can remain unaffected.Both of the above options require having the balance to set them up. Obviously, if you set up a 72t plan from only one IRA and then your expenses increase, you will probably have to bust the plan. In your case, this only involves 18 months of distributions, but if it happens after several years, the penalty and interest bill can be staggering.There might be more options available, but not enough is known about your individual situation to be very specific.2008-11-25 19:56, By: Alan S., IP: [24.116.165.60]

L2: 72(t) Re start after taking a partial IRA early diAlan, this was great input……for this post. One question on setting up two 72T, you suggested that it come from two separate IRA accounts, can they be different IRA accounts with the same financial company (like two IRA account numbers both with Wachovia)?2008-11-26 05:47, By: mcli759, IP: [74.215.109.194]

L2: 72(t) Re start after taking a partial IRA early diYes, the IRA accounts can be with the same custodian or different custodians. In order to have separate 72t plans, you MUST use different accounts because you cannot split a single IRA account into more than one plan and you cannot designate just part of an IRA account to a 72t plan.When you partition an IRA account into more than one, always do it by direct transfer, so you can save your permitted one rollover for emergency needs. Complete the partition BEFORE starting either plan. If you use the same custodian for the accounts make sure they understand that you are using the separate accounts for separate 72t plans rather than using them for a single 72tp plan. When using them for separate plans, funds CANNOT be rolled or transferred between those accounts.There are more calculations and moving parts if you elect more than one plan at the same time, so this option is not for everyone.2008-11-26 12:02, By: Alan S., IP: [24.116.165.60]