Age to use for SEPP
L1: Age to use for SEPPI have been asked that if someone would like to commence 72T distribution this month, January 15, 2013, for the next five years, would he use his curent age of 53 (11/29/1959) or the age he will turn in 2013 (54). It obviously changes the SEPP amount due to the life expectancy table. And the account balance used would be that as of 12/31/12, correct?
Thanks so much.
2013-01-03 17:05, By: Alice, IP: [184.108.40.206]
L2: Age to use for SEPPThe age he will turn in 2013 (54).
The account balance used would be that as of 12/31/12, or any time in the 6 months preceding (i.e. from 6/30/12 thru 12/31/12). It does not have to be only 12/31/12. It can even be within any month, rather than only the last ady of any month, so long as you document the values and calculations.
However, he must continue taking the same annual distributions until the LATER OF 5 years OR 59 1/2. In 5 years he will be only 59, and his plan will not terminate for at least 6 more months. Between 59 and 59 1/2 he will have the option of taking -0-, a full annual distribution, or 6/12 of an annual distribution. No other amounts are allowed. After he becomes 59 1/2, he can take -0-, or any amount that he wants because his plan will have ended. After 59 1/2 he will no longer be subject to the 10% early distribution penalty. All distributions at whatever age are always subject to regular income taxes.2013-01-03 17:50, By: dlzallestaxes, IP: [220.127.116.11]