# Monthly or Annual Interest Rate to Calculate 72t

L1: Monthly or Annual Interest Rate to Calculate 72tI am going to start my 2nd 72t on a 2nd IRA at Vanguard. I started taking monthly withdrawls on my 1st 72t in January 2009. I used the Monthly 120% federal mid-term rate in my 1st 72t calculations. Should I be using the Annual Rate?. Since rates are so low I would like to use the Annual rate to calculate the 2nd 72t and divide the result by 12 to calculate my monthly distributions. Is that acceptable?

The basic question is do Monthly distributions get calculated by the Monthly mid-term rate?

Thanks for any comments.2009-05-20 14:32, By: Telcoguy, IP: [71.251.168.151]

L2: Monthly or Annual Interest Rate to Calculate 72tIt is best to always use the annual rate and divide the annual distribution by 12 to get the monthly amount.

The monthly rate is the monthly equivalent of the annual rate. While taking monthly distributions now, that could change in the future – if you used a monthly rate, what rate would you use to get a semi-quarterly payment?2009-05-20 15:11, By: gfw, IP: [216.80.125.206]

L3: Monthly or Annual Interest Rate to Calculate 72tI have a similar question.

If the annual distribution is not EXACTLY divisible by 12, will it bust the plan (in my case, Iwill be a nickel short for the year)? Or should I insist December’s distribution include the remaining nickel?2009-05-20 15:25, By: ding, IP: [64.12.116.197]

L4: Monthly or Annual Interest Rate to Calculate 72tMerely divide by 12 and round to the nearest one cent.

Generally, being less than 50 cents is ok.2009-05-20 15:53, By: Gfw, IP: [216.80.125.206]