Different distribution amounts from different calculators

L1: Different distribution amounts from different calculators
Hello, everyone! I have been lurking here for awhile, trying to get educated about 72t/SEPP. My particulars:

DOB is 3/17/62
New SEPP plan
IRA is currently $496K
Planning to start distribution June 15
Single, Amortization method

I had a 401K with Vanguard from a previous employer and I let it ride there for seven years after they downsized me. Three weeks ago I did an internal rollover and it’s all in an IRA now. I’m planning to start distribution in July on a SEPP, and we will use that income as a basis to get jobs with less stress and less income for a few years. We are moving from Florida to the Asheville, NC area. Even though we can’t fully retire yet, we feel that moving to the area where we plan to retire and cutting back on work will make it feel as if we’re halfway there.

I have used the calculator here and at a bunch of other places too. All the other placescome up with the same annual distribution number for our situation but the calculator on this site is more than $4K less per year.
The calculatoron this site gives me $22,215.95 and every other calculator gives me $26,904.

Since I know it’s critical to get that number right, I’m wondering what’s causing the discrepancy. I would rather withdraw the larger number but need to withdraw the right number, for obvious reasons. Can anyone explain why the two calculators are giving different results?

Thanks in advance! Lots of good information and helpful people here!
2018-05-14 15:02, By: MINIBee, IP: [70.126.151.175]

L2: Different distribution amounts from different calculators
Good Question! Maybe the site admin can answer.
Based on my preliminary calculations using the CalcXML and Bankrate 72(t) calculators for the amoritzation method single life as described in the IRS publication.
From IRS—-
Fixed amortization method
The fixed amortization method consists of an account balance amortized over a specified number of years equal to life expectancy (single life uniform life or joint life and last survivor) and an interest rate of not more than 120% of the federal mid-term rate. Once an annual distribution amount is calculated under this method, the same dollar amount must be distributed in subsequent years.
For 2011, the annual distribution amount is calculated by amortizing the account balance ($400,000) over a number of years equal to Bob’s single life expectancy (34.2) (obtained from Q&A-1 of I.T. Regs. 1.401(a)(9)-9 using age 50), at a 2.98% interest rate (April 2011 rates). The annual distribution amount is $18,811.
Both the calculators produce the same result, this website provides a different number. Use your judgement.
The amortization calculation is complicated, and thus every website says consult your tax advisor instead of explaining it to you. Because they don’t want to be held liable for making the wrong calculations. Just like the mortgage payment calculations, I understand the concept, don’t try to calculate by hand, just trust calculators that produce the same result, safety in numbers.
2018-05-14 17:38, By: BPrincess, IP: [69.16.147.248]

L3: Different distribution amounts from different calculators
Thanks for your reply, BPrincess. Do you know how I can post a screen grab of the calculations made with the calculator on this site? That shows all the parameters I used and I would be interested to know if you get the same number using my parameters. I too used CalcXML and BankRate plus several others and they ALL had the same result. The calculator here is the only one that’s different.

I am in touch with a CPA andwaiting to find out how much he will charge me to do the calculations. Even then, however, if he makes an error I’m the one who’s on the hook. It seems very few professionals are up-to-speed on this topic.
2018-05-14 17:58, By: MINIBee, IP: [70.126.151.175]

L4: Different distribution amounts from different calculators
Use the calculator that you feel the most comfortable with. We don’t analyze calculators from other websites. Using the sample calculations provided by the IRS, we match almost to the penny. Use the data provided by the IRS and see what the other sites produce.
As stated, use whatever calculator you want, but if the analysis of different calculators is all you want, please consider this post closed.
2018-05-14 20:18, By: Gfw, IP: [2601:741:c200:a420:9115:627:305c:afea]

L5: Different distribution amounts from different calculators
I meant no offense and I wasn’t saying the other ones were right. I just wanted to know how there could be a $4,000 difference in the calculation using the same initial parameters.
2018-05-14 21:04, By: MINIBee, IP: [70.126.151.175]

L5: Different distribution amounts from different calculators
There is a field in the calculator named “IRS penalty rate.” That field was defaulting to 3 and I didn’t change it the first few times I used the calculator. When I changed it to zero then the distribution is the same, $26,904 (26,903.XX). All I was wanting was an explanation about the difference and I guess I found it myself. So can someone tell me what the IRS penalty rate is and if it’s OK to have it set at zero?
2018-05-14 21:19, By: MINIBee, IP: [70.126.151.175]

L6: Different distribution amounts from different calculators
Have you tried reading the information in the yellow and red [Help] link?
2018-05-14 21:23, By: Gfw, IP: [2601:741:c200:a420:9115:627:305c:afea]

L7: Different distribution amounts from different calculators
I tried that button on this forum page and it didn’t do anything. I hadn’t tried it on the calculator page so I’ll do that now. I assumed that HELP button was a universal button for all pages and wasn’t working for some reason. Thanks.
2018-05-14 21:32, By: MINIBee, IP: [70.126.151.175]

L8: Different distribution amounts from different calculators
If I click on the discussion forum [Help] link, I get…
You can return to this page at any time by using theDiscussion Forumlink in the left menu or the72(t) Forumlink in the main menu.
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Close
I’m starting to think you might be happier at a different website.
2018-05-14 22:04, By: Gfw, IP: [2601:741:c200:a420:9115:627:305c:afea]

L9: Different distribution amounts from different calculators
I’m sorry but when I click on the HELP button on a forum page, nothing happens. It works on the calculator page though. I’m using Chrome on a Mac.

I was under the impression that this forum was here to help people. I feel like you’re pushing me away because I asked for help.
2018-05-14 23:14, By: MINIBee, IP: [70.126.151.175]

L9: Different distribution amounts from different calculators
OK, on the forum home page the HELP button does work. If you are on an individual post page it doesn’t work, at least for me. Thanks.
2018-05-14 23:16, By: MINIBee, IP: [70.126.151.175]

L10: Different distribution amounts from different calculators
MINIBee…
I plugged in your info to THIS site’s calculator and the value came out the same as the other sites you mentioned $26,904. I also played with the IRS penalty factor and DID NOT see any impact on the annual amount. Chainging the IRS penalty % obviously did change the penalty amount in dollars but it did not change the Annual Payment received amount.
You might want to double check your entries. I’m not sure how you can get to the $22,216 you mentioned UNLESS you entered your birthdate at 3/17/1975. Then it comes out to exactly $22,216.
Tanko
2018-05-15 20:33, By: Tanko, IP: [24.170.40.100]