First Payment Modificaton Date

You are here:
  • KB Home
  • First Payment Modificaton Date
< Back

L1: First Payment Modificaton DateOn the “First Payment Modificaton Date” calculator I’m using1/1/2011 as that gives me a nice clean cut-off date of 12/31/2015 (I’ll already bepast 59.5 by then)I knowJan 1st of that year will be Saturday and a holiday, butI can still initiate a payment on-line onthe first.Does anyone think I incurring un-needed risk by doing this on a non-business date?If Iused a first payment date of 1/10/2011 and that gave me a “First Payment Modification Date”of 1/10/2016 and I took full payments in years 2011 thru 2015, I would not have to take any in 2016 as long as I waited untill after 1/10/2016 bfore accessing the funds,correct?Thanks so much, Bob.2009-11-22 00:24, By: Bob85364, IP: []
L2: First Payment Modificaton DateYou can’t use 01/01/2010 as a starting date since it isn’t a business day. The first day of a SEPP plan is based on the date of the first distribution, not a date arbitrarily selected by you. While you can request a specific date for the initial distribution, it necessitates cooperation from and coordination with the IRA Trustee/Custodian>>gave me a “First Payment Modification Date”of 1/10/2016Correct – no additional payments until age 70.52009-11-22 12:21, By: Gfw, IP: []

L3: First Payment Modificaton DateSome financial institutions will make account to account transfers immediately when both accounts are within the same intitution. I believe the date in question was Saturday1/1/2011. Irregardless, there is only additional risk in this situation if a withrawl from the SEPP IRA is made on 1/1/2016 or 1/2/2016 (Friday or Saturday) which is not a continuation of the SEPP. This assuming the 1/1/2011 initiated transfer recorded on 1/3/2011. My understanding is that a SEPP is something you draft and document and hope you never have to use to defend your position. As a fellow citizen with 72T SEPP in my future, I would not make a SEPP so detailed as to name the exact date withdrawlsare made, and thus like the idea of starting on the first of the month regardless of day of weekbut will make darn sure the SEPP has been fulfulled and that a full 5 years (if 59.5) have past since that first documented distribution date before making a withdrawl either less or more than in the SEPP.Mike2009-11-22 18:53, By: Mike, IP: []

L4: First Payment Modificaton DateJust a follow-up. If the transaction involves the sale of any securities, etc. it won’t happen on a non-business day. Most institutions will do the transfer on the next business day. At any rate, until the first distribution can be made and documented, the plan hasn’t started. If you are really intent on a 1/1 start date, you need to contact the IRA Custodian/Trusteewhere the funds are located and ask them the question…if a distribution is requested on 1/1,on what date will it be made. Thestatement showing the initial distribution date should be retained as a ‘big’ part of the documentation since it may also determine the first modification date.2009-11-22 19:18, By: Gfw, IP: []

L4: First Payment Modificaton DateI agree. I don’t see any benefit in trying to squeeze out a 2011 initial distribution with no time in 2011 elapsing prior to that first distribution.If you want to eliminate some of the “stub year” elements relating to distribution options, just make sure your first distribution comes prior to the end of January, 2011. You will then basically have a calendar year plan, but must remember NOT to take any distribution in 2016 until after the modification date. You will have taken 60 months out by the end of 2015 and have also passed 59.5.2009-11-22 19:19, By: Alan S., IP: []

L2: First Payment Modificaton DateI also agree, I would try to avoid the 1/1 date especially if you are receiving automatic payments (monthly, quarterly, etc). At my institution (with automatic distributions), if the distribution date falls on a holiday and/or weekend, they make the disbursement on the PREVIOUS business day (NOT the day after) and this could cause an extra payment at the end of the year.
As Alan stated just select a date prior to the end of January. And again, if these are automatic payments use something between the 5th 10th as this would give you ample time at the end of the year if there were any problems, to make a correction.meb242009-11-23 13:32, By: meb24, IP: []