Changing 72T investments
L1: Changing 72T investments
I currently have my retirement IRA set up as a 72T (MetLife variable annuity).
Was wondering would it be okay to take the money out of that investment and roll it over into a totally different direction (maybe a Fidelity IRA I can manage myself) so long as I continue to only withdraw the exact same monthly SEPP I have been taking all
along? The only thing that would change would be the custodian.
2011-08-03 16:39, By: e-mel, IP: [18.104.22.168]
L2: Changing 72T investments
That is OK and does not carry the possible risks ofa partial transfer. You are doing a total transfer of your only 72t IRA.
You should do this as a direct transfer rather than a 60 day indirect rollover to save your one rollover allowed as a safety margin should you have to use it to correct a distribution error caused by distributing too much. A
non reportable transfer also attracts less IRS scrutiny of your plan. Remember to carefully double check your annual total distributions for 2011 since two different custodians will be involved and the 1099R forms must add up to the correct amount, ie. 12
monthly distributions not 11 or 13.
Since one or both of the 1099Rs will be coded as an early distribution, you will need a 5329 to change any Code 1 amounts to exception code “02”.
2011-08-03 17:48, By: Alan S., IP: [22.214.171.124]
L3: Changing 72T investmentsThanks Alan. I should have also mentioned that I also have a small Fidelity rollover IRA (not a 72T) that was started with the money I had in my old employers 401k. However I dont plan on touching it until after I reach 59 1/2. Would that be construed
as the one rollover you mentioned?2011-08-04 21:34, By: E-Mel, IP: [126.96.36.199]
L4: Changing 72T investments
No. The one rollover limit is PER IRA account or the IRA that receives a rollover. This other small IRA was not part of your original 72t balance and you can roll it over one time per year indirectly if you wish.
Be sure NOT to ever combine this other IRA with your 72t IRA accounts in any way as that would bust your plan.
2011-08-04 22:28, By: Alan S., IP: [188.8.131.52]
L5: Changing 72T investmentsGreat. Thank you Alan!2011-08-05 00:07, By: E-Mel, IP: [184.108.40.206]
L6: Changing 72T investments
You might consider the following process to keep things clean for the transfer:
1. Have Met Life stop the monthly distributions immediately. (I’ll assume your last distribution was for July.) Then have them distribute the balance of the annual amount; August through December or 5 months worth.
2. AFTER receiving the distribution described above, set up the new IRAand process a “trustee-to-trustee transfer” from Met Life to the new IRA.
3. Starting in January, 2012, begin monthly distributionsfrom the new IRA forthe exact amount you were receiving from Met Life. You can set up the paperwork to
BEGIN DISTRIBUTIONS IN JANUARY, 2012 at the same time you set up the new IRA.
Hope this idea helps.
2011-08-09 15:46, By: Jim F, IP: [220.127.116.11]