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Annual payout

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Last Updated On
ByJB21

L1: Annual payout
New SEPP
DOB-3/21/64
First Distribution – 10/4/2018
I cant find the answer here to this : If I choose annual (i.e. 1 payment per year), must it be at the same time each year going forward ( e.g. 10/4/2019, 10/4/2020 etc…)
Thanks
2018-08-23 22:36, By: JB21, IP: [165.225.0.103]

L2: Annual payout
This question has been answered numerous times.
1. You do not have to take annual payments on the same date every year.
2. You can change the frequency of your payments every year, and at any time during a year. The ONLY requirement is that the same amount must be taken every calendar year, except if you take a prorata payment the first year (and then the last year).
2018-08-23 22:58, By: dlzallestaxes, IP: [173.75.247.117]

L3: Annual payout
Thanks
2018-08-23 23:06, By: JB21, IP: [165.225.0.103]

L3: Annual payout
I have been told the opposite by Fidelity’s retirement team. I have looked to verify somewhere in the tax code, but I am unable to find it. Can you point me to where I could confirm with Fidelity that I can change the date? Thanks!
2018-08-30 01:35, By: Timode, IP: [2606:a000:1018:83f3:90ea:66e0:933:8a5b]

L4: Annual payout
Ask Fidelity’s retirement team to provide you with their documentation of their position since they disagree with all of the professionals on this website. They will probably also tell you incorrectly that you cannot change the frequency of distributions from year to year.
Of course, if you prefer our position better than theirs, I suggest that you consider moving your IRA to Vanguard or any of the numerous other brokers or mutual funds who agree with our position.
2018-08-30 01:42, By: dlzallestaxes, IP: [173.75.252.244]

L4: Annual payout
Do a Google search on:
A Practical Guide To Substantially Equal Periodic Payments And Internal Revenue Code 72(t)
By
William J. Stecker, CPA
Fourth Edition 2004
You want the fourth edition. See page 75-76 for a discussion on this.
2018-08-30 01:43, By: sm69, IP: [71.84.14.13]

L5: Annual payout
Reference 140 in Stecker’s book states:
IRC 408(d)(2)(B) says: all distributions during any taxable year shall be treated as one distribution.۝ As a result, intra-year distribution locations and frequency are entirely at the discretion of the taxpayer.
2018-08-30 01:54, By: sm69, IP: [71.84.14.13]

L4: Annual payout
That’s strange I was told that I could take a distribution (full) in September 2018 and then turn around and take another in January (2019) by Fidelity if I wanted. I haven’t started yet but will confirm that with them again but it makes perfect sense. The team that told me that was specifically the team that helped me with my 401k transfer and will assist with the 72t calculation when I’m ready.
2018-08-30 03:46, By: MCNE, IP: [2600:1700:1880:501f:a567:c1cf:7e26:9bdb]

L5: Annual payout. 408(d)
Here is section 408(d) regarding IRAs in general.
(d)Tax treatment of distributions
(1)In general

Except as otherwise provided in this subsection, any amount paid or distributed out of an individual retirement plan shall be included in gross income by the payee or distributee, as the case may be, in the manner provided under section 72.

(2)Special rules for applying section 72.For purposes of applying section 72 to any amount described in paragraph (1)
(A)
all individual retirement plans shall be treated as 1 contract,

(B)
all distributions during any taxable year shall be treated as 1 distribution, and

(C)
the value of the contract, income on the contract, and investment in the contract shall be computed as of the close of the calendar year in which the taxable year begins.

For purposes of subparagraph (C), the value of the contract shall be increased by the amount of any distributions during the calendar year.

2018-08-30 03:58, By: sm69, IP: [71.84.14.13]

L5: Annual payout
MCNE — I don’t understand what you think is strange — that you can take a full annual distribution late in 1 calendar year, and then again in January of the following year, OR that Fidelity seems to be making up its own rules or interpretations ?
2018-08-30 04:54, By: dlzallestaxes, IP: [173.75.252.244]

L5: Annual payout
MCNE… you seem to be making the wrong assumption about all the help that Fidelity is willing to provide. Regardless of who does what, if something goes wrong, it is then between you and the IRS. From our planning pointers (https://72t.net/72t/Planning/Pointers)…
Most Important…It is your responsibility. Don’t assume that someone else is taking care of your plan. Check the calculations and make sure that in early December of each year you confirmthat you will have received the required total annual distribution for the year by 12/31. There may be a 60-day window to rollover excess distributions back into the SEPP account, but there is no window of time to take additional funds out of the plan after 12/31 to meet the required annual payment.
2018-08-30 07:41, By: Gfw, IP: [73.217.141.7]

L6: Annual payout
No it’s perfectly understood what Fidelity’s role is so I’m fine. I also plan to take a single distribution each yr of the calculated amount. I don’t want to mess with pulling funds more than once.
2018-09-06 03:22, By: MCNE, IP: [2600:1:9402:34c8:fcc9:5249:4d27:77f6]

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