Change dist amt when 72t ends

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L1: Change dist amt when 72t endsThank you for having the only 72t resource I’ve trusted for 4 years. I would have busted my 72t when it ends in Aug had I not checked your site yesterday. My details: I started 72t monthly distributions Aug 2005 with dist. date on the 20th. The 20th was a Sat that year, so 1st check was issued on Mon the 22nd. I will be 59 1/2 April ’10. I mistakenly thought 7/2010 would be my last 72t check and I could request a different (lesser) amt for a normal 8/20/10 distribution. According to your First Pmt Modification Date calculator, my dt is 8/22/10. I would have busted my 72t by a few days.My questions: Somewhere on your site it states a manual calculation of 365 days x 5 plus 2 days is the modification dt. That gives me 8/23/10. Will either of these dates be too close to the end of the 72t requirement date to begin regular distributions with a different amt?Would it be better to start reg dists in Sept and skip Aug altogether?I don’t know if my custodian will code my April forward checks with dist code 7 when I’ll be 59 1/2 or when I start reg dists. But either way, I should expect 2 1099’s, correct?Thank you.2010-01-29 16:42, By: Jude, IP: []
L2: Change dist amt when 72t endsThe calculator automatically adds leap days for the period – the 365*5+2 is because there could be 2 leap days in a given 5 year period and we like to be conservative.In the final year, assuming that you have met the 5-year requirement and the age 59.5 requirement, you can pretty much: a) take the full annual distribution; or b)8/12s of the annual distribution.The SEPP plan ends at your age 59.5 so there are no penalties on amounts taken after age 59.5.And yes, you should expect, but may not receive, 2 1099 forms.2010-01-29 16:56, By: Gfw, IP: []

L3: Change dist amt when 72t endsThanks for your quick response.Just to clarify, doesn’t my sepp plan end 5 yrs after I started it which will be in August even though I will be 59 1/2 in April?I plan to reduce my distribution amt as soon as the 72t ends in Aug and my concern was whether I could safely reduce it in Aug or wait until Sep.2010-01-29 17:21, By: Jude, IP: []

L4: Change dist amt when 72t endsI don’t know when it will end since I don’t know any details like when the first distribution was made, etc. – you may want to use the Last Payment Date calculator, put in your information and get the answer.2010-01-29 17:33, By: Gfw, IP: []

L5: Change dist amt when 72t endsMy first paragraph may have been too wordy. First check: 8/22/05. Your calculator shows first modification dt: 8/22/10.Can I safely reduce dist amt in Aug on 23rd or should I wait until Sep?2010-01-29 17:52, By: Jude, IP: []

L6: Change dist amt when 72t endsThe problem here is that you are working with an automated distribution system and you don’t know what the defaults are or if they are reliable. 8/22 is a Sunday and the distribution might well be processed on 8/20 instead of 8/23. You are probably safer to terminate the automatic plan immediately after receiving your 60th monthly payment in July. Then on 8/23 or even better on 9/1 order a distribution in any amount you wish or order a new automatic distribution plan.Even with the new post 72t distribution plan, I would avoid distribution dates around the 1st day or the last day of the month, so you will have better control of your total amount of taxable income for each year.2010-01-29 18:31, By: Alan S., IP: []

L7: Change dist amt when 72t endsAlan, thank you very much for your response. I’ll skip Aug and start reg distributions in Sep.2010-01-29 18:46, By: Jude, IP: []