New SEPP / 72T plan
L1: New SEPP / 72T planDOB 4/24/1971
Current 401k balance = $360k (will rollover to an IRA in Feb 2016).
SEPP Interest rate = 9%
Investment return rate = 8% (average)
Date of 1st distribution = 4/1/20162015-09-01 15:59, By: Jeff, IP: [184.108.40.206]
L2: New SEPP / 72T planBased on the information that you posted, please find someone to explain what interest rates can be used for a SEPP plan and probably a few other details.
2015-09-01 16:26, By: Gfw, IP: [220.127.116.11]
L3: New SEPP / 72T plan2nd attempt…
Now that I’m paying attention to the numbers… The max SEPP rate I could safely use is roughly 2.5% ??2015-09-01 16:56, By: Jeff, IP: [18.104.22.168]
L4: New SEPP / 72T planIf you start in April 2016, you won’t know the maximum rate until February/March 2016.
“The interest rate that may be used is any interest rate that is not more than 120 percent of the federal mid-term rate for either of the two months immediately preceding the month in which the distribution begins.”2015-09-01 17:04, By: gfw, IP: [22.214.171.124]
L5: New SEPP / 72T planDo not plan for a distribution on the first or last few days of any month because processing delays can result in the distribution being made in a month you did not intend. That could affect your max interest rate.
Therefore, if you want a distribution in April, 2016, do not request it in March. Request it between 4/1 and 4/15 so it will be an April distribution. For purposes of SEPP distributions, go by the distribution date not the received date. The 1099R gross distribution will report distributions made within a calendar year regardless of when you actually receive them2015-09-01 18:36, By: Alan S, IP: [126.96.36.199]
L4: New SEPP / 72T planRemember that the rates listed in the charts and in the box for the current ones in effect, on this site are already the 120% Fed Midterm Max rates. It sounds like your newer 2.5% “estimate” is arrived at by looking at the current 120% rates which are 2.12% and 2.18% (see below from the site) and then you may bemultiplying those numbersby 1.2which is incorrect. Those are the current rates.
The maximum interest rates where the initial plan distribution occurs during the following time periods are: 09/01/2015 – 09/30/2015: 2.18% | 10/01/2015 – 10/31/2015: 2.18% | 11/01/2015 – 11/30/2015: 2.12%
2015-09-02 03:39, By: Ken, IP: [188.8.131.52]