L1: Ending SEPP
I started my SEPP Plan on 6/1/2006 with my first distribution of $3166 per month which was 1/12 of my required annual distribution. My date of birth is 4/30/1951. Even though I turned 59 1/2 on 10/30/2010 my SEPP plan had to continue for a full 5 years
which ended 6/1/2011. I assumed that as long as I take no less than 5/12 of my annual distribution I will not break the SEPP. At this point I assume the SEPP is completed and I can manage my IRA distributions as I choose. My plan is to reduce my distribution
to $2300 a month which is the amount I need to cover my monthly expenses.
Will this be ok or do I have to take the full distribution for 2011?
2011-11-29 03:21, By: jlgman57, IP: [220.127.116.11]
L2: Ending SEPP
Your ending date looks correct and it sounds like you took a total of $189,960 ($3,166 x 12 x 5) over the 5 year period. If yes, then you are also correct that you should be ok and that you can do what you wish after the 06/01/11 date.
2011-11-29 10:02, By: Gfw, IP: [18.104.22.168]
L3: Ending SEPP
I did withdraw the total amount you indicated was required. Now the trick is to figure out how to preserve the remaining IRA balance in todays tough economy. Although rates were “ONLY 5+%” when I started my SEPP, I did ladder most investments over a 5-10
year period in safe federal bonds and bank cd’s…. This has proved to be a wise decision although I did not fully think so at the time.
The best advise I got at the time was to remain conservative and remember that your retirement fund has to last a long time….
I have used your site from the beginning over 6 years ago as I planned my retirement funding…. one of the best decisions made…
2011-11-29 13:26, By: jlgman57, IP: [22.214.171.124]
L4: Ending SEPP
If your IRA custodian has been coding the 1099R with code 1 in the past and you had to file a 5329 to show exception 02, note that in 2011 they will code the 1099R with code 7 since you are over 59.5 the entire year. Don’t file
a 5329 for 2011 to change the code 7 if that is what you get in January.
If you get something other than Code 7, check back with us.
2011-11-29 17:14, By: Alan S., IP: [126.96.36.199]