pro-rating final distribution?

L1: pro-rating final distribution?Facts:
Date of Birth: 3/4/1946
Initiated SEPP 4/1/1996
Switched to RMD method (Uniform Lifetime Table) in 2003.
Will turn 59 1/2 in September 2005.
Want to distribute as little from IRA as possible.
Question:
Can the calculated RMD (37.8 life expectancy) get pro-rated to reflect that age 59 1/2 is reached mid-year?
Thanks for this website. It is a very valuable resource.2005-01-07 17:46, By: RG, IP: [65.106.88.240]

L2: pro-rating final distribution?Actually September isn”t exactly mid-year. But if you are taking monthly distributions and you turn 59.5 in September, there should be no problem stopping after September since the age 59.5 exception would replace the SEPP exception at that time. 2005-01-08 14:05, By: Gfw, IP: [172.16.1.71]

L2: pro-rating final distribution?Thanks for the response. I thought that September was mid-year because original distribution started in April. I guess that after the first year, everything resets to calendar years.
Sorry to be so dense, but I want to be sure I understand what you mean. I;ve calculated 2005 RMD to be $6500. Started taking $542/month starting January 05. Can I stop drawing after September? I only would have withdrawn $4,878 for nine months.
Thanks again.2005-01-09 14:53, By: RG, IP: [65.106.88.240]

L2: pro-rating final distribution?Hello RG:
I don’t deal in specific numbers; I’ll leave those up to you. Here is the code section that deals with when a plan is modified.
Section 72(t)(4) provides that if the series of substantially equal periodic payments that is otherwise excepted from the 10-percent tax is subsequently modified (other than by reason of death or disability) within a 5-year period beginning on the date of the first payment, or, if later, age 59 1/2, the exception to the 10-percent tax does not apply, and the taxpayer’s tax for the year of modification shall be increased by an amount which, but for the exception, would have been imposed, plus interest for the deferral period.
Remember that an IRA is always between you as the owner and the IRS. I would suggest that for further clarification, check with your IRA Trustee/Custodian. Then check with your tax-advisor/accountant.
Maybe ‘the Badger’ will chime in and be more definitive.2005-01-10 13:38, By: Gfw, IP: [172.16.1.74]

L2: pro-rating final distribution?Good afternoon RG. Let me take a shot at your situation before TheBadger jumps in as I’m sure he will. I have a client with a similar situation as yours who satisfied the second element of SEPP last June, and he was taking monthly distributions.
Since you have been going more than the 5 years, when you hit age 59 1/2 you can make changes. The fact that you switched to RMD in 2003 is really not the issue. If you keep making your (RMD) monthly distributions until after the 59 1/2 date next September, then you’re home free.
I know there are some other distribution optionsavailable toyou for this year, but TheBadger is best equipped to answer them so at this time I’ll yield.
Jim2005-01-10 13:53, By: Jim, IP: [68.1.157.228]