72T vs 72Q

L1: 72T vs 72QHello! I had hoped to get it all together by end of January 2009 but I still need to get my facts together. If I begin a 72t in February 2009, do I still use the “fair mkt. value” of my CDs as of December 31, 2008 or should I wait and use the value as of January 31, 2009, to begin my calculations? Also, doesthe plan inception date begin the day in February it is started, to February xx, 2010, and so on, not 12/31/2008, so I wouldn’t get a monthly payment for January 2009 (if I ask for monthly installments)? One more difficult question – I found out that my 401k was under a “Defined Contribution” plan, which is covered under 72t rules. My lump sum distribution that I receivedis considered a “Defined Benefit” plan by my company, which I think is covered under 72q rules… Will that be a problems for my bank to administer the 72t/72q plan? Any advice? Thank-you!2009-01-28 18:41, By: Jan, IP: [75.20.150.189]
L2: 72T vs 72Q>>If I begin a 72t in February 2009, do I still use the “fair mkt. >>value” of my CDs as of December 31, 2008 or should I wait>>and use the value as of January 31, 2009, to begin my >>calculations? Either date is fine as long asthe value usedrepresents a “resonate representation” of the value for the SEPP on t e start date.>>doesthe plan inception date begin the day in February The plan begins on the date of the 1st distribution. You could take a full (12 months)payment for 2009 -merely coordinate with the custodian/trustee.If you are going to take distributions directly from the 401(k) plan, it wouldbe best to treat is as it’s own SEPP. If you are rolling all the funds into an IRA, then it could be treated as one plan – A defined benefit planis still a tax-qualified plan and after the rollover to an IRA there would be no distinction.2009-01-28 19:09, By: Gfw, IP: [216.80.125.206]

L3: 72T vs 72QLet me answeryour question about “72(t) vs. 72(q).”72(q) does not enter into your picture since it applies to “non-qualified annuities.” If you had an annuity that you had funded with “after-tax dollars” and then wanted to start a SEPP Plan with that annuity, then 72(q) is the correct set of rules that applies. 72(t) applies to401(k) and other “qualified plans” which are employer sponsored, and IRA’s which are generally funded with”pre-tax dollars” either by making annual contributions or doing an “IRA Rollover” which it sounds like you have done.Both 72(t) and 72(q) work essentially the same. The main difference is where the funds came from to set up your account. If you had one of each then you would have as a minimum two separate accounts.Jim2009-01-29 15:17, By: Jim, IP: [70.167.81.119]