is 72T calc applicable to annuity withdrawls?
L1: is 72T calc applicable to annuity withdrawls?I am familar with transferring from the company 401K to a self directed IRA from which I could take SEPP payments for five consecutive years. Using the calculator here and using the 1.83% rate and amort, I get $17,622/yr for a $400K plan.
After meeting with a financial planner, he is promoting a single payment annuity, with a fixed distribution withdrawl for life.
This policy must be resident in an rollover IRA account to avoid the immediate tax liability.
Does the 72T paperwork still have to be filed with tax forms and is the payout subject to the same maximum payout as in the previous calculation, so as to prevent the 10% penalty from kicking in?
As an example, I presume that he cannot say that it will payour $20K/yr?
Stew Corman2010-12-01 22:22, By: scorman, IP: [220.127.116.11]
L2: is 72T calc applicable to annuity withdrawls?This is a common area of confusion. The annuity is merely an investment of the IRA, and can be the only, or one of several, investments in the SEPP account. The distributions from the annuity go to the SEPP account. It is immaterial whether they are more than, less tahn, or equal to the annual distribution allowed.
The SEPP 72-T calculation determines the amount to be withdrawn each year from the SEPP 72-T from whatever cash is available from whatever source. Just be careful that the Dec annuity payment clears in time for the funds to be available for the SEPP 72-T distribution.2010-12-02 01:17, By: dlzallestaxes, IP: [18.104.22.168]