L1: Gidget8313This is a New SEPP plan. My date of birth is 09/10/1960. I am expecting my first distribution on May 7th 2017. My question is, once you set up a SEPP Plan on an IRA account, are you allowed to change the investment strategy within the IRA that is in the SEPP Plan. Can I move from 70% stocks and 30% bondsto 70% bonds and 30% stocks. Or must the investments stay the same for all 5 years? Thanks!
2017-02-27 05:20, By: Desert Tim, IP: [22.214.171.124]
L2: Gidget8313You can change the investments as often as you want, either before starting your plan, or during your plan.
Are you sure that you want to get tied up in a SEPP 72-T plan for 5 years, rather than finding a way to go just 3 years until you are 59 1/2 ?2017-02-27 05:49, By: dlzallestaxes, IP: [126.96.36.199]
L3: Gidget8313That is what I am struggling with. I have generated a good stream of income from Rental properties and my wife has a School pension that will kick in this June. I am simply “short” about $550 per month (the shortage in the budget is more vacation/play money). I do have about $60,000 in an emergency account which I could draw from, leaving the balance at about $40,200. Just am debating what is best. Like having a substantial emergency fund with the Rental properties. Do have about $500 a month excess however to cover most property “fixes”. What is nice is that all properties are paid off.2017-02-27 06:04, By: Desert Tim, IP: [188.8.131.52]
L4: Gidget8313I would not advise my client to do it under your situation. If you need $ in the next 3 years, it probably won’t be much, and it would only cost you an extra 10% penalty. The tax would probably be the same basic tax rate whenever you take it before or after 59 1/2.
There is probably one or more different ways to get thru the next 3 years, including home equity line of credit or loan, if necessary in the next 3 years. Your need is cash flow, which you should also consider the tax aspects of various approaches.
I think you may need an experienced tax planner or financial advisor to plan the years until 70, including the SS benefits alternatives, ROTH conversions, etc.2017-02-27 06:15, By: dlzallestaxes, IP: [184.108.40.206]
L5: Gidget8313Thank you. I do have other alternatives – one being substitute teaching 2 times per week, that alone would make up for the shortfall. Two, evaluating my current retirement budget and making some cuts- the biggest expense being health insurance. Three, just taking the 10% early withdrawal hit which in three years only amounts to $1980. Thanks for the advise!2017-02-27 13:13, By: desert tim, IP: [220.127.116.11]