New -A few basic questions

L1: New -A few basic questions401k-809k
age 46/dob 12/02/1970
retired
plan start date- approx 1/15/18
question-aside from planned distributions- taxed at ordinary income_ Can I also take lump some withdrawals as needed or does that retroactive the 10% penalty_ I understand the lump sum’s would be at 10% + ordinary income… just want to know how or if that would also affect SEPP withdrawals….2017-09-21 19:22, By: Adkar, IP: [207.177.67.86]

L2: New -A few basic questionsShort answer… No. Any withdrawals from the SEPP that are not part of the calculated annual distribution will but the plan and require 10% penalty on all previous withdrawals.2017-09-21 19:44, By: Gfw, IP: [216.80.120.234]

L3: New -A few basic questionsTypo in gfw response — “but the plan” should be “bust the plan”2017-09-22 15:06, By: dlzallestaxes, IP: [173.75.252.16]

L4: New -A few basic questionsA few quick questions for a newbie
I want to take the Annuity method but I read somewhere I can’t use the joint life table un less my spouse is 10 years younger than me is this true? He’s five years older.
Annuity distributions are not re-calculated every year? True? But the other two methods would be?
could I still take a lump sum this year as year one?
I want to use the method that maxes out the payment
What should I use for a rate of return currently performing at 15% +- clearly that won’t hold_
dob12/02/1970
401k-820000
2017-09-28 22:13, By: Adkar, IP: [166.181.85.100]

L5: New -A few basic questionsSince you want to max out your distribution calculation, you should use the amortization method since it generates a slightly higher distribution than the annuity method. You would also choose the single life expectancy table because it also will produce a higher distribution than either of the other two tables.
Amortization or annuity methods produce a fixed dollar distribution and the only calculation is the initial calculation (unless you later elect the one time switch to the RMD method).
You can take out a lump sum distribution in any year and you can take that distribution anytime in the year.
The rate of return is only applicable in estimating what your IRA balance will be as the plan plays out. You do not have to estimate it if you do not want to, but if you want to see these numbers, a return of 15% over time is unrealistic. You would probably use 4-7% depending on how your IRA is invested.
2017-09-29 02:01, By: Alan S, IP: [24.117.172.15]

L3: New -A few basic questionsTo expand on Gfw’s reply…
If you think that you will need a lump sum distribution for possible emergencies, take a portion out of the account that you will be using for your SEPP plan and set up another account. That way any money taken from that account will require the 10% penalty but won’t bust your SEPP plan.2017-09-29 15:17, By: Red Baron, IP: [24.171.38.187]