DOB = 11/2/76. Date of distribution = 1/2020. I’m interested in using a 72t to semi-FIRE soon. I have three retirement accounts that total about 1 million. The largest one has $650k. I’m thinking about doing a 72t solely on this account so I can FIRE from my full time law job which I hate. My spouse and I are both in military reserves and will probably continue to work for about 10 years. We get cheap health insurance this way and would be able to pick up additional full time active military duty if money got tight after I FIRE. I’m also working on building up a large cash cushion in case I need more than what’s in the 72t. Thoughts?
2018-11-17 04:36, By: JoSo, IP: [2600:387:3:801::c2]
Sure, you can partition your IRA accounts before starting your plan into an account with the exact balance needed to fund your estimated annual distribution amount. You can use a reverse calculator to determine the balance needed for various annual distribution amounts. The other accounts will remain totally outside the plan and can be used for emergency distributions subject to the penalty, or can be used to start a second 72t plan at some later date if your situation changes. Another option you have if you want to reduce the 72t distribution from existing plans is to make the one time switch to the RMD method. Roughly that would reduce your annual distribution by around 35% assuming limited investment gains or losses since the plan began. With a 72t plan lasting 16+ years, you can bet that your initial plan will eventually either produce considerably more (then change to RMD) or considerably less (then start a second 72t) than your spending needs.
2018-11-17 17:00, By: Alan S, IP: [22.214.171.124]