About starting a SEPP with an IRA and I have already taken distributions early
L1: About starting a SEPP with an IRA and I have already taken distributions earlyHello
DOB May 25,1957
My IRA (traditional) I want to use for a SEPP program. I will need a SEPP to meet financial need until I reach social security base eligibility at age 62.
Earlier this year I took a distribution of $12,000 (early distribution).
Now it is June, I need to start the SEPP program so that I can have the cashflow needed to live.
Do I use the Dec 2014 statement balance as a basis for calculating the payment?
If I start the SEPP, should I transfer the money first to a NEW IRA first, or use the one I now have?
My balance is smaller of course since I took an early distribution.
Any help is greatly appreciated, I always learn a lot from this site.
J2015-06-07 04:09, By: myfirstquestion, IP: [126.96.36.199]
L2: About starting a SEPP with an IRA and I have already taken distributions early>>Do I use the Dec 2014 statement balance as a basis for calculating the payment?No, use the balance after the distribution was made.
>>should I transfer the money first to a NEW IRA first, or use the one I now have?Use the IRA that you have.You will have to pay taxes and penalties on the 12k on your next return, but that shouldn’t impact starting a new SEPP plan.
With all that said, starting a SEPP plan at age 58 may not make much financial sense. You would be in a 5-year plan that would have to be continued until sometime in 2020. You might be better off merely taking distributions as needed and paying the penalty or even better, finding a different source of funds.
2015-06-07 09:43, By: Gfw, IP: [188.8.131.52]