? on 72(t)

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L1: ? on 72(t)If a 53 year old leaves his currently employer and wants to roll over his 401K/Pension plan and begin taking 72(t) distributions what would be the tax ramifications if he tried to take out an amount in excess of what is allowed by the 72(t) calculations? For example if he wanted to be able to take out $1500 per month this would clearly be more than the 72(t) amount. Would the 10% penalty apply to only the amount in excess of the 72(t) distribution or does tbe fact that he would be taking more than the 72(t) amount basically make the 72(t) clause void and subject all $1500 of the monthly withdrawals to the 10% penalty?2008-09-06 05:45, By: jr, IP: [72.213.46.123]
L2: ? on 72(t)If the payment exceeds the allowable limit for the 72t, the whole payment would be subject to the 10% penalty, and the 72t plan would be busted, so it would be the same tax effect as just taking out the money without a 72t plan.
I recall seeing posts in the past where the person is told to take the “penalty” distribution first, and the set up a 72t plan doing the calculation with the remaining new balance after that, but in your case, you would need a large one time withdrawal (subject to taxes and 10% penalty) and that would then reduce the remaining IRA balance to compute the 72t distribution from, so your remaining payments under 72t SEPP for next 6 years wouldgo even lower than the one you now see which is too low for your desired withdrawal.The monthly Fed 120% midterm interest rates seem to be increasing, so you may be better off waiting for a future start month that uses a higher allowable rate, which will help the calculation ofyour distribution amount. Amortization with single life gives the highest payout. KEN2008-09-06 06:09, By: Ken, IP: [151.199.36.162]

L2: ? on 72(t)Ed-BThat”s the shortest reply I have ever seen you post (which is now deleted). Just kidding. KEN2008-09-06 14:18, By: Ken, IP: [75.67.65.254]

L2: ? on 72(t)Hi, Ken:
Yes, it sure was. I tried to use the new Google browser on this site but it did not work in the message forum. My Opera browser doesn”t work in this area either, although it is excellent everywhere else I browse. Guess I need to keep Old Ugly (IE) around for a while. :-/
It also would not let me edit or delete that message. I”m using IE now and it works OK.
Ed2008-09-07 07:52, By: Ed_B, IP: [67.170.159.37]

L2: ? on 72(t)Ed… be real careful withChrome – it was out less than 24 hours and the security holes started appearing. I also don”t supportOpera as it wouldmean going backwards for a variety of the functions.
The site is designed for IE, however If you don”t like IE, try FireFox version 2. – notBeta 3.
2008-09-07 10:25, By: Gfw, IP: [216.80.125.206]

L2: ? on 72(t)2008-09-08 05:30, By: Chris, IP: [71.205.69.187]

L2: ? on 72(t)Gfw:
I”m not planning to use Chrome… just wanted to try it out. It”s OKbut I didn”t see any real whiz-bang features that would make it amust have item. Perhaps once it matures, it will be fine.
Opera is great. I LOVE the zoom feature. It”s MUCH better than theclunky page zoom in IE7. The speed dial and return to previous webpage functions are also very nice.
I might try FF2 and see what it can do. Thanks for the tip.
Ed2008-09-09 14:29, By: Ed_B, IP: [67.170.159.37]

L2: ? on 72(t)Gfw:This is a Firefox 2 test… only a test. If this was a REAL message, something interesting would appear here… maybe next time! :-)It seems to be OK. Hard to find FF2 now. FF3 seems to be “IT” at the moment.Ed2008-09-09 14:47, By: Ed_B, IP: [67.170.159.37]

L2: ? on 72(t)Ed… The Beta of FF3 seems to still have a few problems – it was haing a hard time recognizing certain date formats that are considered standard.I also have had problems with the Beta if IE8 – it seems tolike lots of memory.By release time, they wil probably both be ok.2008-09-09 14:57, By: Gfw, IP: [98.214.144.242]

L2: ? on 72(t)Gfw:
When you did not list FF3 as a possible browser, I didn”t even try it. It”s too new not to have some bugs, so I am waiting until it is stable before trying it. I have deleted Chrome and will await its maturing.
IE keeps giving me “IE has experienced an error and will close now. We are sorry for the inconvenience. Send an error report to Microsoft? [y/n]”. GRRR. I”d like to send a digital message to Microsoft… a single digit, that is. 😉
I have a dual boot system with Win XP Pro (32-bit) and Win Vista Home Premium x64. Everything else seems to work just fine but IE isa continuous problem and it does not seem to matter whether I am using IE6 or IE7… I get the same result either way. 🙁
Opera, on the other hand, works fine and never chokes like this. It just does not do the forum text on this site. I can read messages OK but cannot compose any. Oh, well. They all seem to have their quirks. :-/
Ed2008-09-10 21:00, By: Ed_B, IP: [67.170.159.37]