Another payment

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L1: Another payment
Fantastic website btw.
DOB 11/8/1964
Start new SEPP 1/15/2019
The calculator brings back 5 payments, last one Jan 2023, with first modification date of May 2024. My question is, can I make the same exact payment January 2024 or do I need to wait until the first modification date has elapsed before making a payment for 2024?
Thank you,
2018-03-12 10:50, By: pgbound, IP: []

L2: Another payment
You didn’t include many details, so…If a 5-year plan, take the 5 annual distributions and wait until the END of the 5 years before taking any additional distributions.
Fyi… The first modification date is MM/DD/YYYY and not MM/YYYY. Don’t disregard the day in the date shown as the first modification date.
2018-03-12 11:07, By: Gfw, IP: []

L3: Another payment
Assume 5 years is Jan 15, 2024, and May 9, 2024 is when I turn 59.5, will a payment made between those dates bust the plan?
2018-03-12 11:58, By: pgbound, IP: []

L4: Another payment
I try not to assume anything – usually results in errors.
Short answer… Yes do some research onArnold v. Comm., 111 TC No. 12 (1998).
2018-03-12 12:46, By: Gfw, IP: []

L5: Another payment
You didn’t provide much info.
1. Is the money now in a 401-K/403-B, or in an IRA ?
2. If not in an IRA, are you employed, and planning to “separate from service” in 2019 ?
3. If so, then you would not need a SEPP 72-T if your employer allows you to remain in its plan, and allows periodic partial withdrawals whenever you request them, because there is an exception from the 10% early distribution penalty in these situations, because you will become 55 before 12/31/2019, and would be allowed to start taking distributions of ANY amount starting in 2019.
4. If it is not in an IRA, and if there is company stock in the 401-K plan, then ask your HR department for the “NUA Cost Basis” of the shares in your account, and research the special tax provisions for NUA’s. (Look at J K Lasser “Your Income Tax” which has a 2-page narrative, with examples, or the IRS pub, or look online, or ask a tax professional.) This could save you thousands, or tens on thousands in taxes. I saved a client over $ 100,000 on a $ 750,000 401-K.)
5. If it is in an IRA, and none of the above apply, then in 2024, I would not take any distribution between 1/15/2024 and 5/9/2024. You should be able to find other sources to get you thru those 4 months.
2018-03-12 15:51, By: dlzallestaxes, IP: []

L6: Another payment
Apologize for the broad-strokes.
I retire May 1st of 2018, will be rolling over 401k and defined benefit monies into an IRA. No company stock. I understand that waiting to the modification date for the next distribution is optimal, however, will making a payment of the exact amount as the previous 5 payments, in between 1/15/2024 and 5/9/2024 constitute busting the plan?
I understand the Arnold vs. comm decision is based on the fact that there was change in payment amount before 60 months had elapsed, my additional payment would take place after my 60 months have completed, and in the same exact amount as all the previous payments.
Thank you for your time and patience.
2018-03-13 10:01, By: pgbound, IP: []

L7: Another payment
If the 5 years has ended (365 days times 5 plus 2 days) and you are over the age of 59.5, the SEPP plan ended.
You would then be free to do what you want until subject to the minimum distribution requirements.
2018-03-13 10:12, By: Gfw, IP: []