Last Year Payment

L1: Last Year Payment I want to transfer my IRA to another custodian. I turn 59.5 October 2009 and started my 72t on a monthly basis in October 2005. Can I take the last 10 months of my 5 yrpayments in a lump sum in January 2009 (with my new custodian)to meet my final year 72t requirement?i dont plan on taking anymore withdrawals until after i turn 59.5.2008-12-03 12:04, By: meg, IP: [207.54.160.234]
L2: Last Year PaymentMake sure that you take your Dec. 2008 payment from your present plan before you transfer the balance to the new plan, and make sure that the new plan understands not to make any distributions in 2008.2008-12-03 12:33, By: dlzallestaxes, IP: [96.245.168.66]

L2: Last Year PaymentYou need to give a few more details, but if your first payment was made on 10/1/2005 then the five year period doesn’t end until 09/30/2010.A SEPP plan ends at the ‘later’ of 5 years or age 59.5 – start with the last payment date calculator and enter your exact information.http://72t.net/Sepp/Irc72tLastPaymentDate.aspx2008-12-03 12:44, By: Gfw, IP: [98.214.144.242]

L2: Last Year PaymentAs Gordon pointed out, your plan does not end in 2009, but on 9/30/2010. A 72t plan must last for the LONGER of 5 years or until age 59.5. In your case, the 5 years is longer and the date you turn 59.5 does not affect the termination date of your plan. Since 2010 is your final year, if you wanted to you could take the 9 months of payments required in a lump sum in January, 2010. Again, this would be 9 months, not 10 months in 2010. You would take nothing in Oct, 2010 because you would already have taken 60 months worth of distributions.I also agree with dlz that you should not attempt a transfer at the end of a year since that provides you no time to correct any mix ups with the two custodians. Start the transfer process in early January, and then determine how you want the 2009 payments distributed. If you want 2009 up front, be aware that you will have to budget carefully to make sure that you do not run out of funds before year end. Same thing in 2010, as a January distribution of 9 months has to last you through the end of September.2008-12-03 16:14, By: Alan S., IP: [24.116.165.60]

L2: Last Year Paymentthanks that makes sense to me. follow up- after i take the 9 months of payments in january 2009 can i do a partial transfer of some assets in the IRA to another custodian prior to me turning 59.5 as long as i dont take any further distributions?2008-12-04 03:41, By: meg, IP: [75.219.12.45]

L2: Last Year PaymentMeg… I’m not totally understanding your last post. Let’s start with you must continue to take payments until the plan ends in 10/2010.In eachof the 5 years you must takeone annual payment. During the course of the 5 year period you must take 5 full annual payments – they can be monthly, annually or however else you decide. Partial transfers may cause other problems – in at least one case, the IRS ruled against a partial transfer – you make partial transfers at your own risk. You may want to read Bill’s article at http://72t.net/Articles/ArticleShow.aspx?WA=260Hope this helps.2008-12-04 03:57, By: Gfw, IP: [98.214.144.242]

L2: Last Year Paymentgfw- thanks for the article.i dont know if you saw my earlier post-i plan on taking the last 9 months of my 72t payments in a lump sum in January 2009. do a partial transfer and not take any further withdrawals. Didnt know if that would pose a problem. I guess i am thinking if i take the required distributions am i allowed to do a partial transfer if i dont take any more money out? Sounds like you are saying that even though i have taken my money out i still need to wait until i reach 59.5 before any other transfers can take place even though no money is being distributed or added.2008-12-04 06:37, By: meg, IP: [207.54.160.234]

L2: Last Year PaymentMeg:If you will be age 59.5 in October, 2009, and you started your 72(t) in October, 2005, then you must have been age 55.5 in October, 2005 when you started your SEPP Plan. Adding 5-years to your age in 2005 means you will be 60.5 when your plan ends. Age 59.5 is not a factor for you.Like GFW said, your plan will end in October, 2010, not October, 2009. You must take a distribution in 2010. You may NOT make changes to distributions, additions of new money or extra distributions from your SEPP Plan Universe until your plan is completed in October, 2010. Pleaseuse the “Last Payment Date” calculator on this site usingthe actual date for your first distribution to determine the exact date that your plan will end.If I understand your situation from the information you have provided, you have one IRA account that constitutes your SEPP Plan Universe, and you want to divide this account into two. Do so at your own peril because the IRS guidelines are not clear. If you make the division, then you will have two IRA accounts that make up your SEPP Plan Universe and all 72(t) rules will apply to both accounts until your plan is complete in October, 2010. May I suggest that you re-read TheBadger’s article.Good luck.Jim2008-12-04 07:31, By: Jim, IP: [70.167.81.119]

L2: Last Year PaymentYou are confusing yourself. 1. Make sure to take your Dec. 2008 distribution from your current custodian.2. In 2009 you will be required to take the equivalent of 12 monthly payments which equal your annual required distribution. You can take the entire amount out in January ( or any other month), or take it monthly, quarterly, or semi-annually.3. Even though you will be 59.5 in Oct. 2009, you must continue your plan until 9/30/2010. Therefore you must take at least 9 month’s worth of payments in 2010 before 9/30/2010.4. If you want to change custodians in January 2009, you can take your 2009 distributions from either your present account before you transfer it in its entirety to the new custodian, or entirely from the new custodian after you transfer it, or split the amounts whatever way you want, so long as the total equals your annual requirement. Either way, transfer your entire balance to your new custodian after taking any ( or no) distribution in January 2009. My suggestion is to do the transfer in january bewforer taking any distribution from your curent custodian. That way you will only get 1 1099-R for 2009 because you will get all distributions only from the new custodian. Als, there will be less of a chance that the annual total will be wrong, which would bust your plan RETROACTIVELY.2008-12-04 10:05, By: dlzallestaxes, IP: [96.245.168.66]