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early withdrawal

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Bynpguy

L1: early withdrawalI have been taking a monthly distribution for the last 1 1/2 years…no problems. I want to pay off my mortgage by taking a certain amount of money out to do that….and am willing to pay the early withdrawal…as well as the taxes. I also want to continue my distribution. My question…can I do this withoutaffecting my distribution? Yes, I know everyone will tell me not to do this…forget that advice please. Let’s assume that I have $670,000 currently….distribution is about $36,000 a year. I want to take $280,000 out (that would do everything I want…plus pay all taxes). Initial amount distribution was based on was $600,000. Other than tax issues…will this cause problems with the distribution?? If so, any other solutions?
Thanks2005-08-28 11:11, By: npguy, IP: [68.9.178.207]

L2: early withdrawalHello npguy:
Needless-to-say, we are not real fond of your plan. Nonetheless, when you take out the extra $280k that it when your 1st plan busted. From then on you have two fundamental choices:
1. Continue making distributions pursuant to the 1st plan. In this case you will owe the 10% surtax on all of those future distributions as well — not what I think you want to happen.
2. Launch a 2nd and new SEPP plan after bustign the old plan; however, you will need to use the then account balance, new interest rates and a new life expectancy which I suspect will result in materially lower annual distributions than current primarily caused by the reducred balance.
TheBadger
wjstecker@wisptel.net
2005-08-28 12:59, By: TheBadger, IP: [66.250.23.21]

L2: early withdrawalIf I understand correctly….I can ‘bust’ my existing distribution….the IRS would want 10% early withdrawal tax for the money I have already taken….would I have to pay that 10% on just what I have taken as a distribution to this point…or would I have to pay the 10% on the full amount in the account? A bit confused….
If I bust…can I then take what I want…pay all taxes as well as the 10%…and then start a new distribution on the remaining money…am I correct?2005-08-28 23:09, By: npguy, IP: [68.9.178.207]

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