can you take out less?

L1: can you take out less?I am retiring soon and have figured out my 3 72(t) amounts as
RMD 11,800 Amort $25,000 Annuity $24,600 (numbers are rounded)

My question is..I am 57..can I take out LESS than the Amort and Annuity factors…say $21,000
as long as i do it for 5 years? I will not need that much money for quite awhile and do not want to
dwindle down my IRA at such a fast rate…so $20-$21k would work better.

HM2007-09-17 13:41, By: HM Bain, IP: [63.93.197.67]

L2: can you take out less?You MUST withdraw the amount you calculate for the method chosen. If you need to reduce the amount your withdraw each year, the solution is simple.
Use the “Reverse Calculator” on this site to determine the amount of money you need in your SEPP Plan account (ususally an IRA) to generate the desired distribution amount.Then transfer the excess amount to another IRA to use for emergencies.
Jim2007-09-17 13:47, By: Jim, IP: [24.252.195.14]

L2: can you take out less?I suggest trying to get to 59 1/2 without setting up a SEPP 72-T. Then you won”t be locked in for 5 years, and can take as little or as much as you need (or -0-) from 59 1/2 to 70 1/2. If you “don”t need that much” until 59 1/2, it might be advisable to consider the 10% penalty just on what you need, if anything, rather than being locked in for 5 years, and having a possible 10% penalty on the cumulative distributions if you “bust” the plan in the 5th year.2007-09-17 14:35, By: dlzallestaxes, IP: [141.151.23.91]

L2: can you take out less?HM
Another sulution is to fool around with the calculator, and use a lower interest rate than the max allowed when you compute the 72t plan, especially if you already have two IRAs. As long as it is lower than themax 120% Midterm rate that is allowed for the first withdrawal month (the rate from either of the two previous months) then you can use it in your setup calculations andit is OK. You shd always have at least 1 OTHER IRA that is not part of your 72t plan, so you have a separate IRA source to tap for money in emergencies. Thenthe 10% penalty is only on the emergency withdrawal takenin that yearduring your five year SEPP plan. OR.. onceyou are over 59 1/2 and still running your five year plan, that 2nd IRA offers you a penalty free source or IRA funds if an emergency come up.This avoids the needto disturb your SEPP 72t plan withdrawals, which would assess the 10% and other interest charges on all SEPP 72t withdrawals to date. BTW- I did what Jim is suggesting in March 2006, by separating my funds into 3 IRA”s with largest one holding exactly the amountneeded to fund my SEPP72t plan. This year I started a 2nd 72t usingIRA#2 to pay the mortgage on asecond home we bought. I have 2 years till I am 59 1/2, and I still have a 3rd IRA for emergency or for post 59 1/2 penalty free withdrawals while my 72t plans are running. KEN2007-09-17 14:39, By: Ken, IP: [151.199.61.30]

L2: can you take out less?DLZ & HM,
As a variation on DLZ”s suggestionof not starting a 72t, HM could start his five years with amortization at his desired $21K figure by lowering the IRA balance he will use and/or using lower rate,and if he really didn”t need that much money each year during the full five years, he could switch to the much lesser RMD amount for the last few years, (after turning 59 1/2) rather than paying the penalty for 2.5 years on his withdrawals, and then pull $$ from the second IRA that was suggested after he is 59 1/2 in any year when the RMD is not enough. KEN2007-09-17 14:46, By: Ken, IP: [151.199.61.30]

L2: can you take out less?ok…let me make sure I understand this.
Should I want to do a 72t…it is advisable to do 2 IRAs…one for an emergency fund..the other for a the 72t.
I can either fund the IRA with the 72t with either the the amount small enough to meet my income needs….or..use a “rate” LOWER than the rate I start my 72t. ***This is where I am a little confused….I can use a rate LOWER than the stated rate..but not higher…correct? and whatever dollar amount that gives me I MUST use…correct?
THANK YOU FOR ALL THE HELPFUL POSTS!!!!!!!!!!!!!!!!!!!!!!!
2007-09-17 18:57, By: HM Bain, IP: [70.132.202.72]

L2: can you take out less?PS…..if i am able to use a “lower rate” how do I document this for the IRS???
2007-09-17 19:00, By: hm, IP: [70.132.202.72]

L2: can you take out less?Yes, you can use a lower rate than the monthly published rate, but NOT a higher rate. Generally, it is better to partition your IRA into separate accounts and still use the full published rate. That gets you the amount you want with the smallest account balance subject to the plan, and that means a larger IRA balance with the account outside the plan.
If you plan on needing more money later, after age 59.5, then you can use the non SEPP IRA account for distributions after 59.5 without penalty. If you need less than the 72t figure generates,as posted previously, you could make the one time switch to the RMD method.
2007-09-17 20:07, By: Alan S., IP: [24.116.165.60]