72T to start a business

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L1: 72T to start a businessI am currently 45 with significant (over $1,000,000) in 401(k) plans and I want to start a business and access that capital. A friend told me I could rollover a portion (say $200,000)to a rollover IRA. Then, take SEPP payments for the next 15 some odd years and avoid the 10% early withdrawal penalty. The payments can then be used (banks willing) as repayment for a bank loan. I understand I would have to pay taxes on the SEPP. And, that the interest on the loan from the bank (secured by the SEPP) is fully deductible since it is a busines loan. Is my friend smoking something funny or is this possible?2001-11-28 10:03, By: Bill, IP: [127.0.0.1]
L2: RE: 72T to start a businessYou could transfer the 200,000 to an IRA and then establish a SEPP plan – at age 45 and 120% AFR, the annual payment from the plan would be in the range of 14,000/year – you can get the exact payments by using our calculators. Distributions from the SEPP should be free of the 10% penalty tax, but as you mentioned, would be subject to the income tax.2001-11-28 10:13, By: Gfw, IP: [127.0.0.1]