increasing distribution after 59 1/2

L1: increasing distribution after 59 1/2i started a 72t in october 2006. i will be 59 1/2 in august of 2008. when can i take additional distributions beyond those provided by substantially equal payments, without penalty? must i wait until after the 5 years of seps, or can i take what i want in addition to the sep after i reach 59 1/2 ?2007-07-17 16:07, By: bob, IP: [68.40.171.147]
L2: increasing distribution after 59 1/2Bob,
If you have another IRA that is not part of your “SEPP universe” it can be tapped once you reach 59 1/2, but if you only have one IRA, or all IRA balances were used to compute your SEPP payment plan, you must wait until 5 years (and a few days) after the first payment was received before taking any other money out of your IRA, or you will “bust the plan”, and are subject to 10% IRS penalty on all prior SEPP withdrawals plus interest that the IRS may add. That is why it is recommened to split your IRA before starting at 72(t) plan, so you can do those kinds of things with the Non-SEPP IRA withotu busting the SEPP IRA. KEN2007-07-17 17:34, By: Ken, IP: [75.67.65.254]

L2: increasing distribution after 59 1/2At least when a 72t is busted that started this close to age 59.5, the retroactive penalty only includes distributions taken prior to age 59.5. If you are taking monthly payments, that”s only 22 or 23 months that avoided penalty, although if you bust toward the end of the 5 years, the interest for those first 22 months could count up.2007-07-17 18:03, By: Alan S., IP: [24.116.66.98]

L2: increasing distribution after 59 1/2Alan”s point is that you should calculate the 10% penalty on your distributions to date. If that “extra tax” for busting the plan isn”t too onerous, then bust it now, andpay the penalty next April.You couldthen make withdrawals as needed thru next August, paying the 10% penalty, but then have unlimited access to your remaining IRA balance.This close to 59 1/2, I don”t think it makes sense to set up a SEPP 72-T. Find other ways to survive financially for the next year.2007-07-17 21:30, By: dlzallestaxes, IP: [141.152.255.66]