last year options
L1: last year optionsThank you for all of the excellent information and answers on this site!
My SEPP plan started on 9/25/08. I’ve only taken annual calendar distributions in the exact same amount, the first one being 9/25/08 and the last one being 12/3/16.
My DOB was 9/5/57 so I turn 59.5 on 3/5/17 and my first modification date is 3/6/17.
As I understand it, I have 3 options in 2017 prior to 3/6/17:
1) Take no distribution
2) Take a pro rated distribution (I have no interest in doing this)
3) Take the full annual distribution
After 3/6/17 I can distribute as much or as little as I wish.
Is my understanding correct?
2017-01-11 19:47, By: JT, IP: [126.96.36.199]
L2: last year optionsYou are exactly correct.
But unless you need funds in the next few weeks, you should wait until 3/6 before taking any distributions. That way, you avoid another 1 coded 1099R and filing a 5329, and you also avoid receiving two 1099R forms, one coded 1 for distributions before the modification date and if you take another distribution later on another 1099R coded 7.2017-01-11 21:10, By: Alan S, IP: [188.8.131.52]
L3: last year optionsThanks Alan. All good points. Also, my SEPP is from a non-qualified annuity account instead of an IRA. Does that make any difference in your answer as to my understanding being correct? To clarify, the only withdrawals taken from the account have been the SEPP distributions previously mentioned.
Dizallestaxes, my plan was, and still is as of now, to wait until December 2017 and decide how much to distribute for the year. I could have made the note you mentioned. I have a particular aversion to the pro rata method due to the extra hassle of more distributions, more chance for error and consistency.
2017-01-11 22:44, By: JT, IP: [184.108.40.206]
L4: last year optionsI hope you do not have a problem. SEPP 72-T calculations have no relationship to the annual distributions from an annuity. If the annuity distributed more than your annual distribution to the IRA, and you took just the SEPP annual distribution, then you are ok. But if the annuity distribution was less than the SEPP annual distribution calculation, then you have busted your SEPP from the beginning.2017-01-11 23:39, By: dlzallestaxes, IP: [220.127.116.11]
L5: last year optionsThe account from which the SEPP was taken was from a non-qualified variable annuity, but the account has never been annuitized (i.e. no annuity has ever been taken, the account allows annuitization but I have never elected to do so). The ONLY withdrawals or distributions from the non-qualified variable annuity account have been the annual SEPP distribution in the same amount which was originally calculated in accordance with 72-T calculations. There is no IRA involved.2017-01-12 00:05, By: JT, IP: [18.104.22.168]
L2: last year optionsIt makes no sense to me that you would indicate that you have no interest in taking a prorate distribution before 3/6/17, but not make a similar note as to taking the full annual distribution before then. Especially when you can take, or not take, any amount after 3/7/2017 with complete flexibility.2017-01-11 21:21, By: dlzallestaxes, IP: [22.214.171.124]