Monthly distribution if I use the 72t method
L1: Monthly distribution if I use the 72t methodI would like to withdraw my funds of $28,733 now sitting in a tax free mutual fund from a previous 401k employer without the 10% tax penalty (to payoff debt) using the 72t distribution method. I am 54 can you please advise what my monthly distribution will be until I’m 59 1/2? 2009-09-17 19:58, By: jackie, IP: [18.104.22.168]
L2: Monthly distribution if I use the 72t methodStart with the calculator at http://72t.net/SeppPaymentCalculator
2009-09-17 20:22, By: Gfw, IP: [22.214.171.124]
L2: Monthly distribution if I use the 72t methodYour posting does not make sense.
1. Was this former 401-k rolled over into an IRA ? If so, then why would you invest it in a tax-free municipal bond fund ? ( The income isn’t taxed while the investments remain in the IRA, and the “tax-free” income becomes TAXABLE when you take it out of any IRA.) ( The tax-free interest ratse are usually lowert than “taxable” interest rates, so you are earning less to start with, and then paying taxes thereby lowering your yield even lower.)
2. Or did you mean that it is now invested in a mutual fund in your IRA, and therefore it is tax-free while in the IRA ?
3. Even though you would be taking distributions for 5 years, the calculated amount would be based upon a life expectancy of about 28 years, so you would be allowed to take only $ 1,000 per year.
Give us better info, and we might be able to respond better.2009-09-17 20:23, By: dlzallestaxes, IP: [126.96.36.199]
L3: Monthly distribution if I use the 72t methodThank you for your quick response. I did mean your point #2. I didn’t realize this plan would only pay $1000 annually, and was based on the life expectancy. I was told by someone else it would be the full amount distributed annually $5-6k. over 5 years until 59 1/2. I knew that didn’t sound correct. 2009-09-17 21:20, By: jackie, IP: [188.8.131.52]