Annual recalc with amortization method

L1: Concerning RBN”s post below: “sepp timing.
RBN states: “I plan to use amortization with *annual recalculation* using the balances and interest rates of December of the preceding year.”
But I thought the beauty of amortizationwas that one need not do annual recalculation. It’s my understanding that only RMD requires annual recalculation. I was hoping to begin my amortization/single life schedule of payments this January, 2008, and take the *same* monthly payment for 60 months, at the end of the process I’ll be 60 years old and can then suspend payments. Correct? Not correct?2007-09-11 07:34, By: Reg, IP: [205.188.117.206]

L2: Concerning RBN”s post below: “sepp timing.Hello reg:
You certainly may use the fixed amortization metrhod; e.g. calculate once and take the same annual distribution for 5 years. Annual recalcuation is also permissible and is considered an sub-methodology of the fixed methodology.
TheBadger
wjstecker@wispertel.net
2007-09-11 07:38, By: TheBadger, IP: [72.42.67.103]

L2: Concerning RBN”s post below: “sepp timing.Hello, Reg:
As always, The Badger is exactly right on this.
I would add that if you choose to go witha recalc method for your SEPP you should establish that fact and document it right from the start.I have a 3″ 3-ring binder that contains every scrap of paper I have that deals with my former 401k account and mycurrent IRA rollover / SEPP account. It is divided into relevant sections and I started it with a 1-page document that describes my SEPP plan as to what I am doing and how I am doing it. It was dated and signed. If I am ever called upon by the IRS to explain my SEPP plan, I will be able to produce all of the documents that support my plan.
I used the fixed amortization calc for my SEPP withno recalculation. I figure that by doing a recalc, that just opens me up to 4 possible chances for errors in my calcs. The risk of an accidental boo-boo do not seem to justify any potential gain from doing recalcs. That”s just my opinion, though, and you may feel differently about it.
The reason why I am not concerned about getting every possible dollar from my SEPP plan is that my wife and I have other sources of money that can be called upon in an emergency. She has a pension and a substantial IRA of her own with no SEPP plan plus we also have a taxable mutual fund account and an emergency cash account. Without these to fall back on in an emergency, I might be more inclined to try to maximize my SEPP payments. The acceptable interest rate has increased substantially from early 2005 when I started my SEPP plan, so more money could be available to me via a recalc. To do that, though, I would have had to start my SEPP plan with the recalc option implemented from day 1. As far as I know, the only change allowed in the calc method is a one time change from either amortization or annuitization to the RMD method.
Ed2007-09-14 11:42, By: Ed_B, IP: [67.170.159.37]