Final Distribution Confusion!
L1: Final Distribution Confusion!
First let me thank everyone for this amazing site and forum. This is an EXISTING SEPP Plan. My Date of Birth is 5/27/1958. The Date of the First Distribution was 12/27/2012. I have made five annual withdrawals from the Plan and turned 59.5 on November 27 of this year. The calculator says my Final Modification Date is 12/28/2017. My question is: Do I HAVE to make a distribution this year (2017)? For several reasons I would rather not make a withdrawal in 2017, effectively ending the Plan. But I don’t want to risk breaking my Plan.
Quoting this source “Once started, payments must continue for the longer of five payment years (from the date of the first distribution) or until age 59-1/2. Once you’ve met the five-year
AND age 59-1/2 point, you can change the distribution pattern, even stopping distributions altogether…”
I have made payments for 5 years, but the last payment was before I reached age 59-1/2. Do I need to make a 6th distribution (this year) now that I have reached 59.5 to meet the requirements of the Plan?
Thanks for any advise!
2017-12-26 21:53, By: George_P, IP: [188.8.131.52]
L2: Final Distribution Confusion!
No. You are done.
1. You have taken distributions IN 5 calendar years — 2012, 2013, 2014, 2015, and 2016.
2. Your plan has been in existence for 5 years = 60 months.
3. You became 59 1/2 AFTER you plan existed for 60 months.
4. You have covered all of the bases. HOME RUN !!!!
2017-12-27 00:22, By: dlzallestaxes, IP: [184.108.40.206]
L3: Final Distribution Confusion!
dlzallestaxes thank you for the reply! But I am still confused!
Am I correct in assuming my Plan began on the date of my first distribution (12/27/2012)? If that’s the case, my plan was only 59 months old on my 59-1/2 birthday (11/27/2017). The Plan will not have been in place for 60 months until tomorrow (12/27/2017). Does that mean I need to make one more distribution? Thanks again!
2017-12-27 01:14, By: George_P, IP: [220.127.116.11]
L4: Final Distribution Confusion!
No. You have already satisfied the 5 annual payment amounts, and are now 59 1/2. Any distribution that you take after 12/27/2017 will be after your plan has ended.
If you took one before 12/27/2017, it would be coded as under the SEPP 72-T plan. Any distribution after 12/27/2017 should be coded as a “regular” distribution, i.e. not subject to “early distribution”, and therefore not needing any exception.
2017-12-27 16:27, By: dlzallestaxes, IP: [18.104.22.168]
L5: Final Distribution Confusion!
dlzallestaxes. Thanks again for your advice.
Just to be clear, you listed three specific criteria in your previous post.
I DO NOT satisfy the third criteria you listed.
“3. You became 59 1/2 AFTER you plan existed for 60 months.”
I became 59 1/2 BEFORE my plan existed for 60 months.
I am still not sure if that is important. Had I established my Plan earlier in the year I won’t have this uncertainty. A good lesson for those preparing a new plan.
2017-12-27 19:34, By: George_P, IP: [22.214.171.124]
L6: Final Distribution Confusion!
My poor wording. I should have said that you were already 59 1/2 when the 60 months for the plan when it terminated.
2017-12-27 20:26, By: dlzallestaxes, IP: [126.96.36.199]
L7: Final Distribution Confusion!
I read your comments to Bob_85364 from yesterday. I just want to make sure that I correctly understand your earlier comments regarding my Plan. Once again my Plan details:
1st Distribution Date: 12/27/2012
Date Age 59.5: 11/27/2017
5 Year Date: 12/27/2017
1st Modification Date: 12/28/2017
My 5th and most recent distribution was on 12/22/2016.
I understand that the Plan terminates on 12/28/2017. That said, am I still required to take a 6th distribution in 2017 to satisfy the Plan? Does having reached the 1st Modification Date allow me to NOT take a distribution for 2017? I just to be clear on this point.
Thanks again for your help! And Happy New Year!
You posted to Bob_85364 yesterday:
BE CAREFUL !!! Not so fast.
First, the plan must be in existence for at least 60 months. Since you took your first annual distribution at some time in 2013, the 60 months will not be up until 1 day after the 5 year anniversary of the first distribution, which by definition will be sometime in 2018 !!! It does NOT end after the 5th annual distribution, which could be as early as the day after the 4-year anniversary of the initial distribution.
Second, even if the plan has been in existence for 60 months, you also must be 59 1/2 as well, because the plan does not terminate until the LATER of these two events.
2018-01-01 02:46, By: George_P, IP: [188.8.131.52]