New SEPP Plan
L1: New SEPP PlanHi, I am 54 years old (DOB=7/29/63) and would like to start a new SEPP plan this month. Using the SEPP calculator on this site and August’s interest rate of 2.34, my annual SEPP payment based on the Amortization Method is $56,330.16.
I have a couple of questions:
1. Does it matter how I take the distributions? Can I take $50,000 now and then take a second distribution of $6,330.16 before the end of the year?
2. Is all I need to do to start a SEPP plan is to request a distribution from my IRA custodian and cite that exception 72(t) applies? Or is there other paperwork I have to complete?
Sorry for the newbie questions.
Al2017-09-22 03:20, By: Al, IP: [22.214.171.124]
L2: New SEPP Plan1. No it doesn’t matter. You will be fine doing $50k now and the remainder before the end of the year (also, you can pro-rate your first years distribution 4/12ths if you wish)
2. Most likely just a distribution form and there should be an option for substantially equal periodic payments. It would be best to check with your custodian. I can vouch that Ameritrade, I just go online and check the option for SEPP.2017-09-22 04:01, By: brkr12002, IP: [126.96.36.199]
L3: New SEPP PlanVanguard also understands SEPP 72-T plans, and many people who post here speak highly of working with them, their excellent funds, and lowest fees.
By the way, is this from an IRA, or a 401-K ?
If a 401-K, can you wait until January 2018 if you are planning to retire ? If so, then you may not have to lock yourself into a 5-year SEPP 72-T if your company allows you to retire, stay in their plan, and take periodic withdrawals of any amount. Also, if you work for a company, and their is company stock in your 401-K, then you should ask the company about the NUA provisions of the federal IRS tax code.2017-09-22 15:19, By: dlzallestaxes, IP: [188.8.131.52]
L4: New SEPP PlanThanks for the replies. This is from an IRA.2017-09-22 20:43, By: Al, IP: [184.108.40.206]