Account Balance

L1: Account BalanceI have a question regarding the definition of account balance when calculating the distribution.
I have my retirement money split between Retirement Plus, a retirement account for Procter & Gamble, and a Rollover IRA. When I do the 72t calculation, can I use the total balance of both accounts? I intend to rollover additional money from the Retirement Plus account into the Rollover IRA as needed. All distributions will be taken from the Rollover IRA.
Ralph K

2003-02-07 12:08, By: Ralph K, IP: [127.0.0.1]

L2: Account BalanceHello Ralph:
The answer depends on whether you remain employed with P&G. If no, then you may use either balance or the sum of the balances to determine your account balance. If the answer is yes, then you assets at P&G are likely restricted, meaning you may not withdraw them until separation of service. In that event, the proper decision would be to only use your rollover IRA balance.
TheBadger
wjstecker@wispertel.net
2003-02-07 12:37, By: TheBadger, IP: [127.0.0.1]

L2: Account BalanceRalph,
If you retired from P&G the year you turned 55 or older, you can take distributions from Retirement Plus on a monthly, quarterly, or “as needed” basis.without doing the equal payments. If you retired before the year you turned 55, the account balance for equal payments would be based upon only what is in the IRA Rollover account. If the IRA account will not provide enough income using one of the three formulas, you can roll additional monies from Retirement Plus to bring the account value up.
Miceli Kunkel
2003-02-07 12:58, By: MiceliKunkel, IP: [127.0.0.1]

L2: Account BalanceIf you retired from P&G the year you turned 55 or older, you can take distributions from Retirement Plus on a monthly, quarterly, or “as needed” basis.without doing the equal payments.
This is absolutely correct; e.g. the use of IRC 72(t)(2)(A)(v). However, this does require a plan that supports “periodic payments” as well as a cooperative plan administrator.

If you retired before the year you turned 55, the account balance for equal payments would be based upon only what is in the IRA Rollover account.
This is incorrect. IRC 72(t) encompasses all forms of “deferred assets” be they IRAs, 401(k)”s, 403(b)”s and essentially all other types/variants of defined contribution monies. As a result, a taxpayer may select one account or some sum of accounts on which to base SEPP distributions. The accounts need not be of identical type. Further, on the presumption that a sum of accounts is chosen, the actual SEPP distributions can be made in any relationship or ratio from those accounts that meets the taxpayers needs.
If the IRA account will not provide enough income using one of the three formulas, you can roll additional monies from Retirement Plus to bring the account value up.
True but not essential.
TheBadger
wjstecker@wispertel.net2003-02-07 13:17, By: TheBadger, IP: [127.0.0.1]

L2: Account BalanceProcter & Gamble”s Retirement Plus does allow employees who retire the year they turn 55 or older to take distributions from the plan without doing the equal payments.
Procter”s plan also allows the participant to take equal payments directly from Retirement Plus. I don”t know if they would allow for distribution of the sum of both accounts at a less than equal ratio.

2003-02-07 13:38, By: MiceliKunkel, IP: [127.0.0.1]

L2: Account BalanceOn the presumption that P&G”s retirement plan supports periodic payments and our original poster has in fact separated from P&G and was 55 or older in the year of his separation; I would forget all about SEPPs and simply take whatever I needed directly from the P&G plan. No rules to follow, no mess, no fuss; just take the money out & pay regular federal tax.
Only if the above rationally does not provide a sufficient distribution would I then take the IRA, split it in two and start a SEPP program on one of them; holding the other in reserve.
TheBadger
wjstecker@wispertel.net

2003-02-07 13:53, By: TheBadger, IP: [127.0.0.1]