discontinuing distributions

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L1: discontinuing distributionsI retired in January, 2000 at age 49 and began taking large “subsantually equal distributions” annually through the 72T program. About 4 or 5 years later I elected to switched to the “required minimum distribution” because my account could not support such large distributions. Now that I’ve completed my 10 yrs of withdrawals can I suspend all distributions or continue to withdraw smaller amounts without penalty (until I’m 70 1/2 yrs old…….I’m 59 now)? Thanks for all feedback.2010-05-26 18:49, By: Chuck, IP: []
L2: discontinuing distributionsStart with our last payment date calculator – it will give you the first modification date. Once you reach that date, no more distributions need occur until you become subject to the minimum distribution rules.2010-05-26 19:02, By: Gfw, IP: []

L2: discontinuing distributionsWhen you are actual age 59 1/2 you may suspend or change distributions as you wish since you have taken 60 months / 5 years of actual distributions. But you must be actual age 59 1/2 to make changes.Jim2010-05-26 19:03, By: Jim, IP: []

L3: discontinuing distributionsIn addition, you DO have options if you turn 59.5 this year with respect to what you distribute prior to the modification date. After the modification date (date you turn 59.5), you can do whatever you choose.But prior to the modification date this year, since you have already have well over 5 years in your plan, you have the following options:1) Take nothing2) Take out a full annual amount3) Pro rate the full annual amount for the number of months ending with the month prior to the month you reach 59.5.Note that Option 1 is not considered to be stopping your plan prior to age 59.5. Your plan still ends on the actual modification date, but you do NOT have to take a distribution in the final stub year, and your plan is still valid.2010-05-26 20:09, By: Alan S., IP: []

L3: discontinuing distributionsCLARIFICATION If you stop taking your distributions 1 day before the age 59 1/2, you will owe the 10% EARLY DISTRIBUTION PENALTY on ALL DISTRIBUTIONS CUMULATIVELY IN TOTAL OVER THE PAST 10 YEARS SINCE YOU STARTED !!!!Definitely wait until you are a few days or weeks over 59 1/2 until you stop taking distributions.2010-05-26 20:12, By: dlzallestaxes, IP: []

L4: discontinuing distributionsDLZ:You are correct … but you are also wrong.What if he decided this year (the last year of his SEPP Plan) to change from a monthly distribution cycle to an annual distribution cycle, and wants to wait until December to take this year’s distribution, and he turns age 59 1/2 in June. He is perfectly within his rights to not take any distribution until December. Once he passes age 59 1/2, he is also perfectly within his rights to decide to quit taking distributions of any amount.Jim2010-05-26 20:22, By: Jim, IP: []

L5: discontinuing distributionsYou and Alan are 100% right. I guess there is a difference in terminology that I should have used – DO NOT TERMINATE YOUR SEPP 72-T PLAN BEFORE 59 1/2, but you can take -0- distribution, the annual distribution, or a proratadistribution in the year that you become 59 1/2, up to that date. After 59 1/2, you can take any amount from -0- up to your full account balance.2010-05-26 20:39, By: dlzallestaxes, IP: []

L6: discontinuing distributionsCorrect. And that assumes that 60 months of distributions have already been taken in years prior to the final stub year, which is the case here.2010-05-27 00:12, By: Alan S., IP: []