NEED HELP!!!

L1: NEED HELP!!!IM GETTING A LOT OF CONFLICTING INFORMATION ABOUT THE RATES I CAN USE TO CALCULATE A 72T WITHDRAWAWL. EVERYTHING I READ FROM THE IRS SAYS THAT YOU CANNOT USE MORE THAN 120% OF THE FEDERAL MIDTERM RATES. OTHERS ARE TELLING ME YOU CAN PUT IN DIFFERENT RATES. SOME ARE CONSERVATIVE RATES LIKE 5%, WHICH IS STILL MORE THAN WHAT IM UNDERSTANDING THE IRS WILL ALLOW. BOTTOM LINE, I HAVE A CLIENT WHO IS 55, IN BAD HEALTH, HAS NOW RETIRED AND NEEDS ABOUT $25,000 YEAR INCOME. HE HAS NOT BEEN APPROVED FOR DISABILITY YET, BUT MORE THAN LIKELY WILL BE. HE CANT WAIT TILL THEN, HE NEEDS THIS MONEY NOW TO LIVE ON. WITH THE ASSETS HE HAS, TO GET THE $25,000 A YEAR FOR THE NEXT 5 YEARS, THE RATE WOULD NEED TO BE ABOUT 12%. HE DOESN”T CARE ABOUT DEPLIETING THIS MONEY, BECAUSE HE HAS OTHER THINGS THAT WILL KICK IN AT 59 1/2. CAN SOMEONE GIVE ME AN INTELEGENT ANSWER?2004-07-19 12:23, By: twis, IP: [24.117.53.152]
L2: NEED HELP!!!Hello twis:
Clearly, the maximum permissible interest rate allowed under RR 2002-62 is 120% of the mid-term applicable federal rate; currently around 4.9%; any rate above that is very suspect.
TheBadger
wjstecker@wispertel.net
2004-07-19 12:49, By: TheBadger, IP: [66.250.23.21]

L2: NEED HELP!!!On the upside, 120% of Fed MTR is the limit;on the downside it is 0%. Use what works within this range for 72(t). But it sounds like you have other problems to deal with.Y
ou can buy an annuity with either a lifetime only or lifetime and period certain annuitization to avoid the 10% early withdrawal penalty. Check with your annuity companies on this one to see what kind of payout you can get. However, with a life expectancy ofabout 30 years,you would probablyneed a rather large lump sum to get the $25k per year with annuitization, so this may not be a workable situation.
Unless someone else has a better idea, and I hope so, then it sounds like taking distributions and paying the penalty might be the answer for now. If the disability comes through as you expect, then the penalty period may be short-lived.
My other suggestion is for you to go to the main page of the web site, click onto the blue rectangle in the upper right corner and buy Bill Stecker’s book. It has been a great resource for me in my practice.
Jim2004-07-19 13:05, By: Jim, IP: [68.225.115.136]