72t value from more than 1 account
L1: 72t value from more than 1 accountI think this is valid to do, but thought I would ask to see if understand correctly.. I have two IRA accounts at TDAmeritrade, can I just add the totals together for the value for the 72t, or do I need to transfer all the funds into one account??
Second question – I also have a 401k that I am considering transferring into one of these IRA accounts. If I was to add the value of all three accounts together (2 IRA and the 401k) for the 72t total, would I still be able to make the transfer at a later date (there would be no other deposits or withdrawals to any of the accounts). The total value would still be the same before and after the transfer..
Thanks for any comments or suggestions…2008-04-17 13:07, By: Goodtimes, IP: [184.108.40.206]
L2: 72t value from more than 1 accountYour first paragraph is not a problem, as you can have more than one IRA account in your “SEPP universe” and you can satisfy your distribution requirement in any combination over the two accounts.
However, you cannot incorporate a totally different type of retirement plan, the 401k, into your SEPP universe consisting of IRA accounts. You would have to start a second or supplemental SEPP plan from the 401k if the plan provided the flexibility to do this.
Therefore, if you need the funds from both sources, you would have to deal with two SEPP plans or you would have to transfer the 401k funds into one of your IRAs BEFORE starting a SEPP plan from the IRAs.
If you separated at 55 from the firm with the 401k, you should check with the plan to see if they offer flexible installments without penalty. This might enable you to avoid starting a 72t .
2008-04-17 14:20, By: Alan S., IP: [220.127.116.11]
L2: 72t value from more than 1 accountI am in kind of the same situation except the transfer has already started. My 401k is closed and the securities are in limbo until all the paperwork is completed. The securities have already been registered to my IRA, but have not been deposited yet. No one seems to know exactly when they will appear in my account. Since the securities have been registered to my IRA, do you think it would be OK to value my 72t including them to get the withdrawal set up this month??2008-04-17 15:59, By: JustFishin, IP: [18.104.22.168]
L2: 72t value from more than 1 accountjust fishin,
Short answer – No. You cannot risk starting a 72t plan until all assets have been deposited into your IRA from the 401k plan including any dividends due but not yet paid. The problem is that any contribution to the 72t IRA plan after you arrive at your initial balance or start distributions would bust the plan. You need to hold out until all the trailing assets are in the IRA. You can then immediately value it on any day after that date and start the 72t plan distributions then.
Because of flexibility you have in the first year, if you really need the funds, you can take a distribution immediately after you are sure all assets have been transferred, then develop your calculations and set up the 2008 annual total or pro rated per month started (you have your choice to pro rate or take full annual) to result in the exact amount distributed for the year. But only after all assets have reached the IRA.2008-04-17 19:41, By: Alan S., IP: [22.214.171.124]