How Can We Help?
< Back
You are here:
Print

distribution schedule

Posted
Last Updated On
BySweep64

L1: distribution schedule
Birthdate 2/29/1964
I plan on taking my 1st annual distribution under the 72T exception on 6/15/2018.
Can my following years distributions occur in January or do I need to keep 6/15 as the distribution date for following years?
Thanks for your help.
2018-06-07 16:20, By: Sweep64, IP: [2601:181:8201:2e80:4261:86ff:fe0f:1249]

L2: sweep64
Dear Sweep64,
From what I can gather from trying to start a SEPP, a financial institution can
mislead a person into a “busted” SEPP, so be careful, and/or get a private ruling letter.
Your first annual distribution…..will it be in cash…shares….or both. I prefer both.
The date you do your first distribution is significant for many reasons. It starts the
clock on your 5-year period. Year 1 = 06/15/2018 to 06/15/2019
Year 2 = 06/15/2019 to 06/15/2020
Year 3 = 06/15/2020 to 06/15/2021
Year 4 = 06/15/2021 to 06/15/2022
Year 5 = 06/15/2022 to 06/15/2023
As you can see, your first distribution was in year 2018. You may make your
2019, 2020, 2021, and 2022 distribution on any day in those years, but just remember
that the first 6 months in 2023 must pass before you change your distribution amount
or you will bust the plan.
I hope I am right in what I have told you. I wish there were a website where a
financial planner could work with us clients on the parameters of the 72t and when the
program accepted our information it “okayed” our plans. This way all financial institutions
would be on the same page, and we Citizens would be releasing our tax-free money from
the bondage of the 401k/IRA in droves.
2018-06-16 18:51, By: 72tired, IP: [2600:1700:de20:6240:bcde:3cb6:8cb:868a]

L3: sweep64
Since you will not reach 59.5 until 8/29/2023, your SEPP will not end until that date. Therefore, you cannot take a non SEPP distribution until that date.
If you take a full annual distribution in 2018, you have the following 3 choices for your SEPP distribution in 2023 prior to 8/29/2023:
1) Take a full annual distribution
2) Take a pro rated distribution of 7/12 of your annual amount
3) Take no distribution because you have already taken out 60 months worth by the end of 2022.
After 8/29/2023 your plan is over and you can take as little or as much as you wish.
2018-06-17 00:38, By: Alan S, IP: [24.117.172.15]

L4: Alan S.
Dear Alan S.
Sweep64’s SEPP plan could end at date of fifth distribution if he were using
.03 Special rules. (a) Complete depletion of assets.
2018-06-18 17:17, By: 72tired, IP: [2600:1700:de20:6240:d559:af66:d02b:61e5]

L5: Alan S.
Actually, the plan ends when the IRA is depleted, regardless of when that happens. This is very rare and cannot happen without a very poor choice of undiversified investments.
The plan will also end upon death or disability meeting the definition in Sec 72(m)(7).
2018-06-18 18:03, By: Alan S, IP: [24.117.172.15]

Table of Contents