how to invest for 72t

L1: how to invest for 72tI have 560k to invest in a 72t plan. I only need 24k per year for 5 years I am 57 now. In 5 years at 62 I will draw ss and not need as much from my investments. What is the best thing to invest in so I still will have most of my original investment at age 62 after the 72t plan runs its 5 year course.2007-07-19 08:12, By: rj, IP: [71.228.234.92]
L2: how to invest for 72tIf you want to have most of your original investment left at 62, you should probably invest more conservatively than you otherwise would. Normally, someone with a 72t should maintain more cash or ST bond funds because you have to meet your distribution requirements, and it”s not good to have to sell more volatile investments when the market is down to fund your distribution.
For those with multiple retirement accounts outside the 72t, the overall investment allocation does not have to be altered, but the 72t account(s) should contain the more liquid portion of the overall allocation per above and the other accounts can maintain the aggressive components. If you run your 72t account dry because of volatile or bad investments, your 72t is NOT busted, but you must then start another one, which means at least another 5 years, and that”s not a good thing.
On the other hand, if you end up with unexpected income and want to get out of your 72t, then you could change the investments in the 72t account to the risky ones. If the account runs dry, you have no further requirement and you won”t need to start another plan because of the other income.
As you can see, this decision should be individually tailored to your specific circumstances and concerns.2007-07-19 15:59, By: Alan S., IP: [24.116.66.98]

L2: how to invest for 72tRJ:
The best thing, in my opinion, is to invest in a well diversified batch of low cost mutual funds. Although your investing comfort zone and mine are likely to be different, I use the following basic allocation: 10-15%money market 40-45% large cap value funds 20-25% small and mid-cap funds 15-20% in short-term bonds / TIPS. This has worked well for me but this is largely a function of the good stock market during the past 2.5 years.
I do maintain enough cash in the MM fund that I can meet about 18 months of SEPP payments. This is in case a recession comes along and depresses my share prices below the point at which I want to sell them. I also direct that all dividends, interest, and annual fund distributions are put into the MM fund and that all SEPP payments come from the MM fund. Using this technique, I have not had to sell a single fund share since starting my SEPP. I recently raised my cash amount in the MM fund to completely fundthe remaining 2.5 years of my SEPP plan.
I am well aware that this plan is not unbreakable but it seems to come as close as any I”ve seen. Another thing that helps my SEPP is that the distribution amount is relatively small. I did not bother with splitting my 401k plan money into 2-3 IRAs because that was not necessary. I have other sources of funds in case of emergency and will not be tempted to bust my SEPP to gain access to additional funds.
Ed2007-07-20 20:30, By: Ed_B, IP: [67.170.159.37]