Multiple accounts / SEP

You are here:
< Back

L1: Multiple accounts / SEP
Thanks for all the advice on my previous question. Things may be a little more complicated and I am looking for a little more information.
It seems like people recommend using the end of the calendar year (12/31/10) for my account balances. I would prefer to do that anyway as I prefer to use my account balances at that time for my calculations. At that time I had three accounts, one with Vanguard,
one with Scottrade, and an SEP with Merrill-Lynch. I rolled the ML SEP into the Scottrade account in May of this year.
I want to use all three accounts for my 72t calculations if I can.
Does the SEP complicate things? If so, can I exclude it from calculations (it is about 3% of my overall balance)? If I do exclude it, does that complicate future calculations?
Or would I just be better off using a more recent date after I had eliminated the ML account and if so, what is the safest date to use (June 30th?) and do I have any leeway on that?
Thank you — Richard
2011-08-24 18:14, By: Rewrite, IP: [216.246.68.53]

L2: Multiple accounts / SEP
Richard,
The rollover eliminated your option to use the 12/31 date and 12/31 looks back a little too far anyway. You would have to use a date for the two remaining accounts AFTER all rollovers or transfers in or out of those account had
been completed. You also cannot use PART of any account for your initial balance.

That leaves your current options for account balance:
1) One of the two remaining accounts after all transfers affecting that account
2) Both of the two remaining accounts after all transfers
Recent market volatility may have introduced yet another limitation for your account balance. You must use a balance that is “representative” of the account balance when you start the plan. The IRS has not defined a limit that
would be considered reasonable, but I think you may be on thin ice to use a value that is more than 15% different from the current value. Let’s assume your account has declined 20% from the 6/30 date, which would otherwise be a good date to use. I would work
backward from the present date until you find a date where the balance is no more than 15% higher than the present and consider using that balance, but you need to make copies of a statement or online print of both of the accounts you plan to use for the date
selected (same date for both) to document the balance you select.

2011-08-24 19:49, By: Alan S., IP: [67.61.144.221]

L3: Multiple accounts / SEP
Thank you for your help.
A few more details then:
My current balance for everything is 87% of my December 31st total. It is 95% of my June 30th total, the last date I have a Vanguard statement for. Would you recommend using the June 30th numbers or should I wait until early October when I will have a more
accurate picture and use the September 30th statement (Vanguard only issues quaterly statements)?
2011-08-25 17:32, By: Rewrite, IP: [216.246.68.53]

L4: Multiple accounts / SEP
Any of the month-end balances from June on should be ok to use. One aspect that you have not mentioned, and may not have considered, is which month’s interest rate you are planning to use. Also, you have not indicated:
1. How much do you want/need in 2011 ?
2. How much annually needed in 2012-2016/2017, or longer if you aren’t 54 1/2 yet ?
3. How much are these various month-end balances, so you can determine if you can set aside some of your IRA/401-K for future emergency needs ?
4. Have you used the “reverse calculator” on this site ?
5. What is your date of birth ?

By the way, you can get online statements from Vanguard for every month end, and even on any date, just like I can do for myself and clients when doing planning.
2011-08-25 18:32, By: dlzallestaxes, IP: [96.227.217.194]

L4: Multiple accounts / SEP
With the current large monthly reductions in interest rates, you probably should start the plan in September so you can use the higher July rate. And just use the 6/30 account statements for each IRA account for your opening
balance. That is also likely to be a higher balance than you will have on any later month end or quarterly statements. This also gives you time to double check all your calculations because you must order the first distribution in time to be sure that it is
distributed no later than 9/30. Be sure you don’t wait so long in Sept that that Vanguard would miss the 9/30 deadline.
2011-08-25 18:40, By: Alan S., IP: [67.61.144.221]