Last monthly SEPP payment
L1: Last monthly SEPP paymentI have calculated that July-08 would be the last monthly payment that would satisfy both the 5 year and age 59 1/2 requirement ( shall be 59 1/2 on June 18-08 and my 1st monthly SEPP payment was July -03 so in July I will have recieved 61 monthly payments.What is required if anything to end the plan with no penalties?On the plan submitted to my broker I said the last monthly payment should be Aug-08 (was allowing a safety net).Is there a problem if I recieve one extra monthly payment coded 2 in box 7 of the 1099R form?Should I notify my broker to change the box 7 code for Aug -08 to reflect that I am age 59 1/2 and no longer on SEPP plan?Any advice appreciated , thanks.2008-05-22 07:31, By: majortom6x, IP: [22.214.171.124]
L2: Last monthly SEPP paymentAs far as I know, there is nothing that officially ends the plan. You simply take the calculated distributions for 5 years / age 59.5 and call it good. After that time, you can take as much or as little as you want until age 70.5 when the RMD rule kicks in.
Allowing a little time for a safety net seems wise to me. I will likely do the same thing.
There should be no problem with receiving extra payments. Once the SEPP ends, you are free to take what you want. If that is the same amount as your SEPP that should be no problem at all.
Your 1099-R for tax year 2008 could be interesting, though. Custodians do not seem to have a standard way of handling this. Some will issue 2 1099-Rs, one for distributions that occur before age 59.5 and one for distributions that occur after age 59.5. Others simply send out a single one and let their clients settle it with the IRS via the client filing a form 5329.Notifying your broker of your plans in advance seems a good idea too. Even if they have this all figured out, it does not hurt to confirm what you want done.Ed2008-05-22 10:59, By: Ed_B, IP: [126.96.36.199]