Pension Assets – IRA rollover (72t) and partial di

L1: Pension Assets – IRA rollover (72t) and partial diI have a client who is 51 years old and was recently excessed by her employer. She has a pension of approximately 175k.
She would like to rollover a large portion (155k)of her pension assets to an IRA and then take Substantially Equal Periodic Payments.Her employer allows split rollovers.
Additionally, she would like to have a distribution of 20k paid directly to her. She realizes that there would be a 20% withholding. This would enable her to have an emergency fund as she realizes that she cannot deviate from the SEPP distributions until age 59 1/2.
Will the 20k distribution affect her 72t distribution in any way shape or form?
Thanks for your cooperation in this matter.2004-02-26 18:41, By: jc, IP: [12.221.34.192]

L2: Pension Assets – IRA rollover (72t) and partial diIf it were me.. I’de do a direct transfer of the$20,000 to one IRA account and the balance $155,000)to another IRA account. That way she doesn’t have to worry about the withholding.
Document the SEPP plan basedon the 2nd ($155,000) IRA and base all calculations on the 2nd IRA. 2004-02-26 18:59, By: Gfw, IP: [12.221.34.192]

L2: Pension Assets – IRA rollover (72t) and partial diI concur with GFW on using the two IRA accounts.
Since she wants the $20k as an ’emergency fund’ type account, she could leave the account intact until she actually needs the funds. This way the money could continue to grow tax deferred, and she would only create a taxable event when the money is actually needed and withdrawn. Depending on her needs, this could spread outover several years, since this is only anticipated to be used if needed.
Jim2004-02-27 07:50, By: Jim, IP: [68.1.147.61]