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Reasonable interest rates

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Last Updated On
ByBob

L1: Reasonable interest ratesIn your examples for a reasonable interest rate, (Amortization Factor method) you show examples of 8%, 9% and long term Federal rates as well as the current mid term rate.
Is there any way to use a rate of say 6% (As a reasonable rate) or 120% of long term (5.75%) as opposed to the current Midterm rate of about 4.2%
In other words I would like to withdraw annually more than the amount allowed using the midterm rate.
If I must use the midtern rate, what are the tax results of withdrawing additional funds.
Thanks for your time

2003-02-18 18:45, By: Bob, IP: [127.0.0.1]

L2: Reasonable interest ratesThe examples are valid for plans governed by IRS Notice 89-25. Unfortunately, any plans adopted after 12/31/2002 that involve tax-qualified funds are subject to RR 2002-62…

The interest rate that may be used is any interest rate that is not more than 120 percent of the federal mid-term rate for either of the two months immediately preceding the month in which the distribution begins.
A SEPP plan is all or nothing and the penalty is simple… 10% of the amount distributed.
2003-02-18 19:05, By: Gfw, IP: [127.0.0.1]

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