End od SEPP
L1: End od SEPPHave had SEPP running for 7 years with a monthly distribution. Will turn 59.5 on 2/28/10. Reading previous posts it appears I would be fine if I took my last SEPP distribution in 12/09. My plan is not to take any distributions at all( SEPP OR NORMAL REGULAR DISTRIBUTIONS)in 2010 and this way I can avoid any 1099’s in 2010. Is this ok or should I take a distribution in 1/10. Thanks for a great site that has helped me since 2001.2009-07-08 13:33, By: Ed, IP: [220.127.116.11]
L2: End od SEPPEd,
Your plan is fine, particularly if you do not touch the IRA account in 2010 at all. No 1099R is good since you will not have to be concerned with confusing or incorrect distribution coding on the 1099R.2009-07-09 00:09, By: Alan S., IP: [18.104.22.168]
L3: End od SEPPEd:
Askyour IRA custodian how they code Form 1099-R in the year you turn age 59 1/2. I have found that most custodians will issue two forms; one for pre-59 1/2 while SEPP Distributions are running with either Code 1 or Code 2,and the second for post-59 1/2 distributions with Code 7 or “Normal.” I found one fund family that didn’t change from SEPP Distribution coding until they were told to make the change, and my client was about to begin his RMD’s because he was soon turning 70 1/2. So you need to knowyour custodians policy.
But like Alan said, if you don’t want to take any distributions in 2010 then you are just fine with that plan.
Jim2009-07-09 13:37, By: Jim, IP: [22.214.171.124]
L4: End od SEPPGood point from Jim.
Presently it is nearly impossible to predict how a given custodian will code a 1099R, particularly in the final year. There are various mutations, and a given custodian may also change policy from year to year. Correct adjustments using Form 5329 are easily possible assuming the plan remained valid.2009-07-09 21:47, By: Alan S., IP: [126.96.36.199]
L5: End od SEPPThanks guys for the input. My custodian still codes 1099’s as a 2. In order not to have any confusion I am not going to take any distribution in 2010 from these IRA”S. This way I can avoidany 1099’s from custodian any any IRS confusion. My company went out of business this year so plan is to supplement income in 2010 from $$ in the company 401k. Going to wait on that also till March 2010 so I am passed my 59.5 birthday. 2009-07-10 00:25, By: ED, IP: [188.8.131.52]
L6: End od SEPPCheck with the administrator of the company’s 401-K. If the plan permits it, you can take distributions in any amount from a 401-k in the year that you are separated from service without any 10% penalty if you are, or will become, 55 or more in that year.2009-07-10 02:36, By: dlzallestaxes, IP: [184.108.40.206]