Maximum interest allowed for ammoritization method

L1: Maximum interest allowed for ammoritization methodI am 50 years of age and retired last year. I plan on starting monthly 72t withdrawals to start this January. I have been to several retirement seminars given to the my company early retirees. The interest rate allowable seems to be a “grey cloud”. I would like to plug in 10 or 11 percent. This calculates the amount I would like to live on the next 9 1/2 years. I asked the financial folks giving the seminars if any of their clients had ever been audited over the interest rate used, they all replied “no”. I have some other funding that will kick in within the next 10 years, so I am not worried about making this pot last another 30 years.2002-01-01 10:22, By: JBV, IP: [127.0.0.1]
L2: RE: Maximum interest allowed for ammoritization meActually, the interest rate is only a grey cloud when you don’t want to accept what historically has been considered a Reasonable Interest Rate. The IRS has historically approved rates consistent with the published Applicable Federal Rates. The most common being the 120% AFR which for the month of January is 6.57% – a long way from 10% or 11%. People don’t get audited for an interest rate they typically get audited for another reason and the interest rate is merely one of the factors that are looked at by the IRS.Before the sale is made, promises are easy to make but, sometimes they are harder to keep. If someone is encouraging you to use the 10% or 11% rate, make sure that you get them to put their name on it in writing that way, if you do get stuck paying the penalties and back taxes, you’ll have someone to go after. You are also overlooking one additional very important party to the agreement the IRA Custodian or Trustee. Unless they are will to buy into your assumptions as reasonable, they won’t be checking the appropriate box on IRS Form 1099R stating that the distribution isn’t subject to the 10% penalty tax then it’s purely up to you to justify to the IRS what you are doing. In my real life, I act as an IRA Custodian and I wouldn’t even consider using your assumptions my guess is you’ll have hard time finding any that will.2002-01-01 11:55, By: Gfw, IP: [127.0.0.1]