L1: Calculator questionI THINK I know the answer to this question, but want to be sure:
The72T calculator displays thedetails for each year untill the 5 year OR 59.5 age limit is reached. But does this imply that the annual payment amount would bevalideach year for my entire calculated life expectancy?
Thanks much. Bob.
2008-04-09 12:57, By: Bob_in_the_az, IP: [18.104.22.168]
L2: Calculator questionThe calculator doesn”t imply anything.
It merely shows and calculates for the years illustrated which are the years that the SEPP is in operation.2008-04-10 02:29, By: Gfw, IP: [22.214.171.124]
L2: Calculator questionThe annual payment amount, if fact, the entire SEPP, may last your entire life if that”s what you want. The IRS requires it last at least 5 years, or until you reach age 59-1/2 (whichever occurs last). After that, you can end the SEPP and take whatever distributions you want without the 10% penalty.2008-04-10 06:40, By: SteveJ, IP: [126.96.36.199]
L2: Calculator questionHello Bob:
The key word in your question is “valid”. Since the law says: “for the life(or life expectancy) of the employee…”, the IRS therefore selected some mathematical formulas (amortization and annuitization) that use a life expectancy factoror value; the implication being that the resultantnumber of a calculated annual witrhdrawal willbe an amount, that all else being equal, will be a valid annual withdrawal for your lifetime. Now, all else is rarely equal:
1. You mught not achieve gains in your investments equal to the interest assumption in the formulas.
2. You might not die on time; instead, you might live somewhat longer (welcome Wal Mart).
Generally speaking, most taxpayers launch SEPP plans in their early to mid-50”s and then modify (usually lower) their annual distributions when things like social security, pensions and medicare kick in in the early to mid-60”s.
2008-04-10 07:12, By: TheBadger, IP: [188.8.131.52]
L2: Calculator questionThank you all for the responses!
Bob. 2008-04-10 08:34, By: Bob_in_the_az, IP: [184.108.40.206]