Help With Account Balance
L1: Help With Account Balance
I just retired and am about to begin setting up a SEPP. The ruling wording on what account balance to use seems a bit vague to me. What I read says I can use
any date from December 31, 2010 to the present.
But, my situation has some catches.
If I used the December 31, balance of $230,000, that would not take into account a $50,000 loan I took out from the account for a new home prior to retiring. These loans are permitted on federal TSP accounts as long as paid off before retirement.
If I used my June 31, 2011 balance of $280,000, that would give me the most to work with since I had by this time paid that loan back.
However, my current account balance is $240,000 because after I retired, I took out an allowed one time partial cash withdrawl of $40,000 (with penalty).
I would like to use the 6/31/11 balance to obtain the most SEPP income, and the vague wording seems to permit that. Thoughts?
2011-07-19 22:35, By: ecam, IP: [184.108.40.206]
L2: Help With Account Balance
Use the $240,000 – that is a reasonable representation of your TRUE acount balance. Re-read the definition, it talks about reasonable.
2011-07-19 23:15, By: Gfw, IP: [220.127.116.11]
L3: Help With Account Balance
If you have a statement dated 6/31/2011, return it. There are only 30 days in June.
2011-07-19 23:38, By: dlzallestaxes, IP: [18.104.22.168]
L4: Help With Account Balance
Dlz… 30 days has September, April, June & November – good catch on the details
2011-07-19 23:50, By: Gfw, IP: [22.214.171.124]
L5: Help With Account Balance
When I learned it, the word was “hath”, not has.
2011-07-19 23:57, By: dlzallestaxes, IP: [126.96.36.199]
L6: Help With Account Balance
You must be a lot older than me, did you live in Biblical times?
2011-07-20 00:00, By: Gfw, IP: [188.8.131.52]
L7: Help With Account Balance
The TSP does not directly support SEPP plans, so if you want to set the plan up directly from the TSP, you need to do the calcalution and set up fixed installments that equal the annual calculation. It might be preferable to
do a direct rollover to an IRA and use the IRA for the plan. You will have more control and more flexibility to correct potential errors.
For example, in your TSP if there is a matching contribution that is not yet in the plan, receiving a contribution can bust your plan.
Finally, if you will turn 55 before the end of this year, you could take penalty free distributions directly from the TSP and would not need a SEPP plan.
2011-07-20 00:23, By: Alan S., IP: [184.108.40.206]