Establish new plan/changing dist frequency
L1: Establish new plan/changing dist frequency New plan-bal $850k
I want to establish new plan yet this year taking one lump sum withdraw of +-$33,000 in December and then effective January 2018 and going forward I want to take that $33,000 over the course of 12 monthly installments_ Is taking it as a lump sum this year going to create some issues…..
also when I calculate-do I calculate the going forward monthly withdraws at $850k as well or $850k less the $33k?2017-10-09 18:37, By: Adkar, IP: [126.96.36.199]
L2: Establish new plan/changing dist frequency 1. You can take your 2017 annual distribution as a lump sum, unless you wanted to take a prorated amount in the first calendar year.
2. You can take your 2018 and any future year as either a lump sum at any time during the year, or at any frequency (i.e. monthly, quarterly, semi-annually, or whenever you want) so long as you take the same annual distribution each year.
3. Your annual distribution will not change regardless how your account changes in value.2017-10-09 20:37, By: dlzallestaxes, IP: [188.8.131.52]
L3: Establish new plan/changing dist frequency Another quick question with the market fluctuating do I have to use whatever the total is the day I set the plan up_ Or is there some flexibility_ For example if I wanted to turn the paperwork in today I’d have to turn it in at 823,000_ However I’m currently getting an 18% return so can I use a higher number or does it have to be exactly what it is that day? I know we’re only talking about a couple hundred dollars here there when it comes down to the actual distribution by month but I’m just curious2017-10-09 22:47, By: Adkar, IP: [184.108.40.206]
L4: Establish new plan/changing dist frequency If you are asking this basic question, you apparently do not understand all of the rules about SEPP 72-T.
BE CAREFUL, or you can cost yourself a lot in penalties if you bust the plan before it is legally over.
You can use any balance in the 6 months before you start the plan (i.e. when you make the first distribution). It is usually “best” to use the highest month-end balance during that period because those are the easiest to document, and to determine the correct interest rate to use in the calculation.
We also usually recommend that you set up a separate IRA with some of your assets that is not a part of your “SEPP 72-T UNIVERSE”. This account is used for any emergencies so as not to bust your entire plan, and subject yourself to a 10% penalty on the cumulative amount of all distributions from the beginning of your plan.
I suggest that you study the guidance on this website before you start your plan.
P.S. The amount of your current return is immaterial to SEPP 72-T plans and distributions. You were very loose with figures in your initial posting. At the top you said your balance was $ 850,000, but later you used $ 833,000. You said you wanted to take $ 33,000+/-, but SEPP 72-Ts don’t work with rough figures. The calculations are very specific, even down to the penny for the annual distributions.2017-10-09 23:48, By: dlzallestaxes, IP: [220.127.116.11]
L5: Establish new plan/changing dist frequency Thank you for your sage advice- I do have three other more significant accounts that will not be part of this universe_ I also understand how to use the calculator and that and that calculations need to be precise.._apologies for playing a little fast and loose with my example_ I really appreciate your input and will continue to learn before I pull the trigger_ Thank you so much2017-10-10 02:57, By: Adkar, IP: [18.104.22.168]