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L1: problemThis is my problem. I would like to roll my 401k into an IRA at my credit union but they won’t or can’t do the 72t calculation. I’ve contacted an actuary ( the only one in our yellow pages). They don’t deal with individuals. Most investment advisers can do it if you’re a client and put your money into bonds or stocks.That’s not going to happen. At this point in time I can get a 5 yr. IRA cd at 4.5percent insured to $250,000 through the national credit union insurance organization. In theory I should be able to use any of the calculators online and if I stay under the calculations for the 120 percent midterm rate, I should meet the guidelines. NOT what I want to do but my next step is to write my federal Rep. and fight city hall. Does anyone know who I could contact for the calculation? Location is Harrisburg, Pa. Thanks.2008-12-21 17:44, By: rt, IP: []
L2: problem – or – No ProblemNo bank or Credit Union has any obligation to perform your calculations. Nor does any stockbroker or investment house. Unless you totally lack confidence, merely use the calculators on this site like a lot of others do. Even better, spend some time learning about SEPPs by reading the material on this site or by purchasing Bill’s book “A Practical Guide” -details can be found at study IRS form 5329 as you will probably have to file it annually to claim the exemption.Regardless of who does the calculations,your IRA will be between you and the IRS.If you really want to pay someone to do something that you can do yourself, contact Bill Stecker (posts as’The Badger’)- I’m sure that he would be happy to oblige!2008-12-21 18:29, By: Gfw, IP: []

L3: problem – or – No ProblemI appreciate all the replies. I have been studying the 72t. issue since I learned about it in 1998 when people were given early retirement packages and discussions revolved around the sepp. and I was able to discover the section in the IRA pub. about the exceptions and avoiding the 10% penalty. Confidence is not a problem , more like feeling comfortable and talking to others that have done this.I am aware of form 5329 and as I understand it you would need to file it if the correct distribution code is not inserted correctly in box7 of your 1099. My CU doesn’t have a problem if you need to touch the principal of the cd since it would be an IRA cd. The person I talked to at the IRS mentioned this site as a place for information. Kudos. A great reference. If I’m permitted now my soapbox. I find it absolutely amazing that the Gov. feels the need to regulate my life in regards to this retirement issue yet they deregulate Wall Street that has no vested interest in my personal life what so ever and gives my employer permission to freeze my pension effectively cutting it in half at age 60. They then give me half of that amount in my 401 and call it a benefit. They only reason I can consider taking an early retirement is that I never had any children and my wife is retired with benefits and is collecting social security. She is 8 years older than me. Maybe we’d like to have a retired life together. Where is that exception?2008-12-24 14:33, By: rt, IP: []

L2: problemIs the CU flexible enough to offer a CD product from which you can take your annual or periodic payment without an early withdrawal penalty? CDs normally are not good instruments to fund a SEPP payment, particularly those with a term longer than 1 year. If you are going to try to match the interest payments to your calculation, you will need to have all the mechanics worked out with the CU in advance, and it is probable that the CU does not support the rigid requirements of a 72t plan, at least not with a straight CD account.Perhaps if the interest were paid into a savings or MM account and was always somewhat more than the amount of your calculation, you would have the flexibility you need to take your annual amount outwhen you wish.2008-12-21 23:23, By: Alan S., IP: []

L3: problemThere is no problem with using CDS for SEPP 72-T plans. You just have to make sure not to invest all of the IRA account assigned to it. Leave some extra cash to supplement the CD interest received by November 30 of each calendar year so that you can adjust the Dec payment to the required annual distribution. If the annual CD interest exceeds the required annual payment you should also be ok. Thee annual interest rarely would exactly equal your required distributions. It is only a “cash flow” coordination that you have to be careful of.2008-12-22 05:55, By: dlzallestaxes, IP: []