Can I use an interest rate below the max allowed to come up with a withdrawal am

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L1: Can I use an interest rate below the max allowed to come up with a withdrawal amI plan on starting a SEPP next year and just have a generic question. I want to withdrawal 25k a year and plan on taking my balance and then working backwards and coming up with a interest rate that generates the 25k that I want. As long as the interest rate is below the max allowed am I ok in doing this.2014-09-11 11:22, By: dumbfarmer, IP: [67.214.7.88]
L2: Can I use an interest rate below the max allowed to come up with a withdrawal amWhile you CAN do it that way, we would not recommend that approach.
It would be better to use the “reverse calculator” to determine the minimum amount of your IRA that would be needed to generate the $ 25,000/year that you want. Then you put any balance of your IRA into a separate account, so that you have emergency funds for either a 2nd SEPP 72-T, or to just use as needed even though there would be a 10% penalty on those secondary withdrawals, unless a different exception might apply at that time.
You should give us an idea of your DOB and IRA balance, or if your money is in a 401-K, or if so, if there is company stock in your 401-K plan.2014-09-11 13:28, By: dlzallestaxes, IP: [96.245.107.94]

L3: Can I use an interest rate below the max allowed to come up with a withdrawal amDOB 9/13/62 Rollover IRA Balance = Approx. 550,000 (strickly stocks managed myself)
Plan on 1 annual withdrawal every October for 25k. Will have to withdrawal for 7 years. Need rates to go up before starting SEPP to approx. 2.50%. Have plenty of other cash for emergencies. Most all in other retirement accts available for more SEPP’s if necessary.2014-09-11 19:19, By: dumbfarmer, IP: [67.214.7.88]

L4: Can I use an interest rate below the max allowed to come up with a withdrawal amOK. It sounds like you have the other contingencies covered.
Do some tax planning to determine if you won’t go into a higher tax bracket this year if you took a full year’s distribution for 2014, even in Dec, and used that excess to supplement any shortfall in future years. For example, if you planned on 3/12, or about $ 6,000 in 2014, you could take $ 25,000 and use the extra $ 19,000 to help out if the current rate only provided $ 22,000. The $ 19,000 would provide an extra $ 3,000/year for 6 years if you are disciplined enough to use it up that way. Income earned on it before the 7 th year would probably cover the 7th year shortfall with the extra $ 1,000 not used by then.2014-09-11 19:49, By: dlzallestaxes, IP: [96.245.107.94]

L5: Can I use an interest rate below the max allowed to come up with a withdrawal amOK, thanks for time and effort in response on this issue and all the other questions. I refer to this site from time to time and always enjoy the questions and responses. Thanks again.2014-09-11 19:57, By: dumbfarmer, IP: [67.214.7.88]

L5: Can I use an interest rate below the max allowed to come up with a withdrawal amdlz, just to clarify, there is no issue of using say 1.41% as my rate when the current mid- termis at 2.27%.
I was planning on using that rate because it looks like at that rate I wouldn’t even be drawing on all of the dividends from the ira in my situation when I get ready to establish my sepp. Thanks.2014-09-12 14:58, By: brkr12002, IP: [75.19.0.175]

L6: Can I use an interest rate below the max allowed to come up with a withdrawal amYes, you can use a lower rate on 100% of your IRA. However, we recommend using less of your IRA at the maximum rate. That way you can keep a significant portion of your IRA separate in case you need it later for an emergency, rather than tieing up all of your IRA for the full 5 years or even longer.
For example, assume that you can get the same withdrawal on $ 100,000 using 2.27% and keep an extra $ 50,000, or $ 150,000 using 1.41%. Which way makes more sense to you ?2014-09-12 16:10, By: dlzallestaxes, IP: [96.245.107.94]

L7: Can I use an interest rate below the max allowed to come up with a withdrawal amThanks. Yes, I was still going to split up the ira into seperate accounts, just in case of emergencies.
Mainly just trying to stay within a certain tax bracket. Dividends from brokerage account will provide most living expenses. The SEPP will be discrectionary spending.2014-09-15 14:23, By: brkr12002, IP: [97.65.53.253]