amortized method

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L1: amortized methodUsing the amortized method, the interest rate was 6.13% when I retired in 2007 at the age of 55. This rate is the 120% rate allowable by the IRS. My question is when doing the calculation for 72t, do you have to take the full maximum 6.13% amount each year or can you take a lesser percentage each year and not exceeding the max amount? Also, do you have to receive the exact monthly or annual amount until age 591/2?2009-12-31 18:53, By: firedog, IP: []
L2: amortized methodWithout using the one time change to the minimum distribution method, the annual distributionmust remain at the calculated amount until the later of 5 years or age 59.5Based on your post, I hope you aren’t taking 6.13% as a distribution – that wouldn’t be a valid method. In addition to the initial balance in your IRA, the interest rate is one of two factors used to calculate the initial distribution, not the only factor.2009-12-31 19:05, By: Gfw, IP: []

L3: amortized methodGfwWhat is the other factor???????2009-12-31 20:56, By: firedog, IP: []

L4: amortized methodFiredog,Going back on this site to page 2 or 3 of older max rates, I found 6.13% as a valid rate published for Aug 2007, so if your plan had initial payment in Sept or Oct 2007, you are OK with that rate. The other factor (for initial calculation) Gordon is mentioning is your attained age in 2007 (along with your initial balance used in the calculations).I started in 2006 with rate in the 5’s, and am nowdoing one time switch in 2010 to RMD method, which will lower my withdrawal about 60% this year, to keep the IRA from being drained too soon, as I get to Feb 2011 for last payment under that 72t plan.KEN2010-01-01 01:22, By: Ken, IP: []

L4: amortized methodfiredog…As Ken pointed out, the other factor was your age in 2007. Based on the interest rate of that you used (6.13%), your first SEPP distribution would have occurred in either September or October of 2007.Using 6.13%, age 55 and a starting balance of $100,000 (you didn’t actually give a starting balance) the annual distribution calculated byour calculatorwould have been $7,402.19. At that point your life expectancy was 29.6 years – the period that the fund was amortized over.Each year of the SEPP plan – in your case until age 59.5 -you would have to receive $7,402.19 as the annual distribution. The annual amount can be distributed annually, monthly or in any other manner as long as your received $7,402.19. The only exceptions would possibly have occurred in the first year or the year in which to turn age 59.5.2010-01-01 12:01, By: Gfw, IP: []