My SEPP scenario plus a couple questions
L1: My SEPP scenario plus a couple questionsHello,
This is my first post, so I apologize if any mistakes.
My SEPP scenario (plus a couple questions):
Retirement Date: 6/24/17
My age is 48 (2-20-69); though not relevant to this scenario, wife is 44
Planned 1st SEPP withdrawal date: 8/28/17
Interest Rate (June or July) so June’s 2.35
TSP Account balance on December 31, 2016: $604279.90 (72t Net calculator implies to round up, so I am using the amount of $604280.)
Highest TSP balance between 12-31-16 and mid June 2017: $628500.
I plan on rolling over from my TSP in Federal Government to Vanguard in late July
I will be using Fixed Amortization, Single Life Expectancy
Prorate 1st year: (questions below) but for sake of the calculator, No
I want monthly deposits from SEPP
Using 72t Net SEPP calculator
Question #1: My yearly withdrawal would be: $25601 (based on the $604280). This would calculate the monthly (25601/12) payments to be: $2088.4166, which I assume it translates to $2088.42 per month (rounded). Is my math correct?
Question #2: I wanted to inquire about the account balance to be used with the Fixed Amortization method.
Am I required to use the 12-31-16 account balance of $604279.90 or is it a “Reasonable manner” (based on the IRS interpretation) to assume that I can use ANY daily account balance betweeen 12-31-16 and my retirement date of 6-24-17, when using the Fixed Amortization method?
Question #3: Reference the prorate the first year. In my scenario, do I have the option of choosing a prorated amount of 5/12 or a full year amount for the remaining year, essentially 12/12 for just the 5 months (August to December payments)? I am attempting to understand this prorated issue better.
Question #4: If I have the option of choosing to not prorate the 1st year, how do I “choose” that? I assume it is a box to mark in the SEPP withdrawal paperwork. Or is a dollar figure that I specifically put on the paperwork?
I thank everyone in advance for your help and advice!
Ron2017-07-02 18:05, By: Jedischultz, IP: [126.96.36.199]
L2: My SEPP scenario plus a couple questionsWith regard to the account balance you use for the calcs: As far as I have seen in reading this site for over 10 years, it has to be a balance from the actual IRA(s) that you are using as the basis for the 72T SEPP plan, so I believe it cannot be computed yet using the balance in the TSP plan before it is transferred. With that said, the balance that hits the new IRA would be the one to consider using for your calcs, as I don’t expect it will change much between the transfer after you retire, and your planned first withdrawal date.2017-07-03 03:28, By: Ken, IP: [188.8.131.52]