72T – RMD foul-up

L1: 72T – RMD foul-upI’ve been taking an annual 72t distribution from an IRA except for this past year when my financial advisor at a well-known investment house didn’t follow through with the transaction and now I understand that I may be liable for penalty, etc. I’ve been taking this distribution since 2000. A few years ago, the method of distribution was changed to an RMD to avoid withdrawing all of my funds in the account. As a result, I only receive about $1600 annually (after taxes). What would I be required to do now that I am in this situation.2011-04-30 16:34, By: Laine, IP: [71.225.250.3]
L2: 72T – RMD foul-upNeed more info – Specifically, what is your age?2011-04-30 17:37, By: meb24, IP: [173.49.14.209]

L2: 72T – RMD foul-upIt constantly amazes me that SEPP participants rely on someone else to plan their problems. Un fortunately, the IRS won’t hold the advisor responsible, they only hold you responsible. The last of our Planning Pointers…

Most Important- It is your responsibility. Don’t assume that someone else is taking care of your plan. Check the calculations and make sure that in early December of each year you check to make sure that you will have received the total annual distribution for the year. There may be a 60 days window to rollover excess distributions, but there is no window of time to take additional funds out of the plan after 12/31 to meet the required annual payment.

If you missed the distributions and there is no real administrative errors and you are under age 59.5, you could possibly owe the 10% penalty on all distributions back to the year 2000.
If you have something in writing obligating the advisor or the fiirm to make the distributions to you, you may have a case against the advisor – if nothing in writing, you are probably on your own.
You can always hope that the IRS misses the obvious, but I wouldn’y count on it.At this point, you may want to find a competent tax advisor to help you though the mess.2011-04-30 17:59, By: Gfw, IP: [24.148.10.164]