One Time Dist during 72t payout
L1: One Time Dist during 72t payoutI started taking distributions 1 1/2 years ago at age 58. I’m now 59 1/2 and would like to take a one time distribution. Can I take this and continue my 72tmonthly payout without any penalties?2010-12-01 21:50, By: KC, IP: [18.104.22.168]
L2: One Time Dist during 72t payoutUsually no. But it depends.
Youmight be able totake additional distributions that qualify under other exceptions to the 10% penalty. However, there is no clearcut definitive guidance from teh IRS in this regard. There was a recent case which did allow extra withdrawals for education. You have to decide if you are willing to take the chance of it not being allowed.
Present further details, and we might be able to advise you better. Especiallyhow much you have taken already, and how much you want to take as an extra, and for what reason. in 2009 and 2010, and what your annual limitation is. Also, how much is your SEPP plan worth now.2010-12-02 01:24, By: dlzallestaxes, IP: [22.214.171.124]
L3: One Time Dist during 72t payoutMy b/d is 2/25/1951. I started w/ $111,500 in Sept. 2009. I have taken $411.97 for 15 months, starting Oct. 1, 2009. The present value is $117,700. I am thinking of moving a would use some of this money for a down payment ona house if I can’t sell my present home. So, I may need $25-30,000 in a one time distribution. I would like to continue my monthly payment for the full 5 years, so I am not penalized. So, can I take money out for the down payment, continue my 72t payments and not raise red flags or pay any penalties?2010-12-02 19:24, By: KC, IP: [126.96.36.199]
L4: One Time Dist during 72t payoutUnfortunately, no.
There is another exception for $ 10,000 but it is only for First-Time Homebuyers.
And, you cannoy borrow the money from an IRA, but you could borrow up to $ 50,000 from a 401-K, to be repaid no later than 5 years later.2010-12-02 19:49, By: dlzallestaxes, IP: [188.8.131.52]
L4: One Time Dist during 72t payoutNo, you cannot do that without busting your plan. That said, you have apparently only taken out $4532 that was penalty free prior to turning 59.5, so the cost of busting your plan is only around $500 including interest. You are not penalized for distributions that you took after 59.5, which includes those after 8/25/2010.
You will also not be penalized for the large distribution, but of course that distribution is the one that will trigger the penalty on the first 11 months worth.
Instead of tying yourself down to this plan for another 4 years, perhaps the cost to bust is worth this investment. The real question is whether the cost of this property plus another $500 to bust the plan is worth it given your overall financial situation.
2010-12-02 19:58, By: Alan S., IP: [184.108.40.206]