Busting and restarting 72t payouts

L1: Busting and restarting 72t payoutsI started a 72t payout in May of 2002 with a balance of 126000.00. 120% of the mid term rate at the time was 3.81 for a monthly payout of 565.00 per month approx. In the meantime my account value has increased to 142000.00. I am wanting to take out 12000.00 as I need about 6,000 to 7,000 for some expenses. I know that this will bust my plan and I will owe taxes on the amount withdrawn up to this point in time which is about 5100.00. I also know that I will owe a 10% penalty on EITHER that amount or the equivalent of a full years payouts (I am unsure of that at this point, but that is not critical to my decision). My question is can I then turn around and start a new 72t payout plan using the 130000.00 balance and the current 120% mid term rate of 4.23% for a new payout amount of $621.00 per month? I will turn 52 in August of this year…would I use this age for the new payout plan? Thanks for any help in advance.2004-03-04 18:49, By: RM, IP: [65.19.65.159]
L2: Busting and restarting 72t payoutsIf you bust the plan you will owe taxes on the amount withdrawn, penalties on the amount withdrawn and the IRS will calculate any interest on past due taxes/penalties.
You should have no problem restarting the SEPP based on current assumptions. You may even want to split a position of the remaining balance into pieces and using only part for a SEPP so you aren’t “in need” again in the future.
With all that said, consider other sources for the funds you need like a home equity loan, a loan on a cash value life insurance policy, etc – the cost to you will probably be far less.2004-03-05 10:19, By: Gfw, IP: [172.16.1.74]