annual set up
L1: annual set upLooking at starting an Annual withdraw either Jan. 1st or July 1st 2010. Questions are, if started in July, is annual prorated for the year, will the last year also be prorated?If part way through the 5 year withdrawI wanted to change to RMD will that cause complications? Also, thinking of using a little less % then the 120% allowed, thinking that can be “protection” from any penalties. Lastly, past postings questioned Vanguard not giving correct tax information. Is that still an issue? Would this be better to pay a tax consultant to set this up or is setting upthe Annual 72t not that complicated?2009-12-22 19:06, By: Carol, IP: [22.214.171.124]
L2: annual set upYou aren’t really providing enough information for anyone to give you a decent answer. Start with the “First Modification Date” calculator – it will tell you the first modification date.
What you do in the first year has little to no impact on what you do in the final year. Just remember that the 5-year rule starts with the date of the first distribution ends 365 days times 5 years plus about 2 days for good measure. And that if using the 5-year rule you must take out the calculated annual distribution times 5.
And finally, I don’t believe that anyone has stated that Vanguard is not giving correct tax information. If that had been posted, I would have deleted the post. Vanguard may not put a code of ‘2’ on the 1099, but that is their right and probably the right way to code a 1099 unless they request you to certify annually as to the status of the plan – If they did that, they would probably also have to charge you for something that you can readily do yourself. 2009-12-22 19:44, By: Gfw, IP: [126.96.36.199]
L3: annual set upCarol,My recollection when I set up my Vanguard SEPP plan (72t) in 2006 is that they had a multi page (PDF)form that I had to download from their site to fill out and then submit to them which was the calculations needed for my annual withdrawal total. It believe it also allowed me to specify payment frequency and tax withholdings. I matched the payment result to the calculator on this site, and it was under $1.00 in difference, so that proved to me we were using correct method. Well in advance of setting up your plan, you can ask then to point out to that part of website (I recall it being a bit hard to find on my own) so you can print it out and “play with it”. I do not recall them offering to help me figure out my payment amount.It was self-service as I recall.As far as using a lesser figure than the 120% max allowed,if you didthat and later made a mistake in withdrawals, it would not help you that you had been taking less than the max allowed, since the payments have to be substantailly equal throughout the plan. It may only help to start with a lower PCT (and continue those withdrawal amounts for the entire plan) if you would have otherwise used a % that was accidentally too high. The general recommendation here is to allocate just enough $$ in the IRA (using the max allowed %) and move the rest of the money to another IRA before starting your calcs and starting your plan.Their is a calculator on this site that can help you figure that out. KEN2009-12-23 16:16, By: Ken, IP: [188.8.131.52]