IRA Annuity – With SEPP – Withdrawl question
L1: IRA Annuity – With SEPP – Withdrawl questionI retired 12-1-09 at age 55 (11-20-09). I was able to take my company retirement in a lump sum. Half of it was invested into an annuity and a 72T set up.I started receiving equal quarterly payments on 3-1-10.This annuity is one that quarantees that the balance of the fund will never fall below the original base investment. Now my investor wants to pull the rather large excess over the orginal base out (prior to the end of the 5 yrs) and invest it elsewhere at greater returns. There are mixed professional opinions on whether this can be done. As long as the original base is there – and the interest is enough to guarantee my quarterly payment – can the excess be withdrawn without causing problems with the IRS. I am aware there are VERY stiff penalties if this is not allowed. There is no way I want this invalidated and have to pay penalties and interest. IMO – March 1 is just around the corner. 2014-08-15 19:56, By: sunshine, IP: [126.96.36.199]
L2: IRA Annuity – With SEPP – Withdrawl questionThat would be another partial transfer (see other post). If transferrred into a new IRA or IRA annuity, then this particular SEPP would include the prior annuity and the new IRA account together, and together would have to distribute the same annual distribution, although the distribution could also be taken from just one of them as long as you realize the other is also part of the plan. Pulling out these gains would of course terminate the feature that the original annuity could not fall below it’s purchase price since even a small loss after the transfer would drop it below the purchase price.
With respect to the SEPP, since you only have a few months to go, I would advise against any more transfers of any kind until the SEPP is over next March. Are you even dead sure that the original calculations were correct? No point in attracting any IRS attention to these plans at this point.
Re quarterly payments – I assume you intend to take your last quarterly distribution on 12/1, which would bring the plan distribution total to 20 equal quarterly payments?2014-08-15 21:50, By: Alan S, IP: [188.8.131.52]