Do I qualify for an SEPP ?
L1: Do I qualify for an SEPP ?
Hello, I am currently 51 (Aug /1960). Iretired in Dec of 2010 and rolled my 401K to an IRA. I manage the investments in this IRA. I would like to start an SEPP in Jan 2012. Do I qualify? Is there a minimum age?Does my active management of the IRA account
matter for an SEPP? As I read the tax code, it appears to me that simply being retired from the income source (401K employer) is the only requirement. Is this the case? Thank you.
2011-09-26 23:06, By: Dryhopped2, IP: [184.108.40.206]
L2: Do I qualify for an SEPP ?
There really are no qualifications needed to adopt a plan, you just need to execute the plan flawlessly. But there are plenty of situations under which you CAN start a plan, but it is not wise to start one. You do not have to
be retired or unemployed to start or maintain a 72t plan.
Similarly, who manages the investments in the plan have no bearing on the plan itself. Either way, the plan must meet the same requirements with respect to the initial calculation and the need to distribute the correct amount
each year, no more and no less.
Your plan starting in January, 2012 would have to last around 8 years, until you reach 59.5. Read the planning pointers on this site. Determine whether your full IRA balance will be needed to fund the plan, or whether you should
partition off a separate IRA for emergency needs which will be subject to penalized distributions in most cases, but could serve as a safety valve if you need more money later on.
2011-09-27 00:33, By: Alan S., IP: [220.127.116.11]