remaining payments

L1: remaining paymentsMy understanding of the 72t is that you take income to 59.5 or 5 years if longer. I am 60 and my 5 years will complete in August 07. Can I take the remaining payments in a lump sum even though I have been taking them on a monthly basis? Thanks2007-03-02 06:26, By: Mike , IP: [24.158.215.203]
L2: remaining paymentsYou can make arrangements with your trustee to make the final payment in one lump sum. This is exactly what I am planning on doing next January for my remaining 5 monthly payments in that year. All that matters is the amount on the 1099 (of course I”m still concerned about how distributions after this will impact my 1099.) Make sure you don”t take any additional distributions before the end date of your 5 year period.
Congratulations on completing your SEPP!2007-03-02 07:23, By: John, IP: [71.208.231.158]

L2: remaining paymentsCan an individual do their own SEPP?
I have an on-line account regular IRA. How much – if any – does a financial instituion need to be involved?
Would I be better of to use my 401k if I retire later this year – or use my IRA? My IRA account is much larger than my 401k. I will soon be 58.2007-03-02 11:27, By: baskin, IP: [66.6.80.48]

L2: remaining payments> I will soon be 58.
Can you find any other way (besides a 72(t) SEPP) to provide another source of income until you are 59 1/2? The closer an individual is to age 59 1/2 the less desirable it is to start a SEPP.
> Can an individual do their own SEPP?
Consider purchasing Bill Stecker”s book (offered on this web site) or at a minimum spending some significant time researching the info on this web site. The simpler your situation the easier it is to understand what is needed. I did mine without additional help, other than what I learned on this site (mine is very simple, basically one trustee, one account andno recalculation ).
> How much – if any – does a financial instituion need to be involved?
At the time I set my SEPP up the trusteeprovided a service to calculate the annual distribution amount but they have ceased doing that (probably concerned about liability.) Now my trustee just has checkboxes on the forms that need to be submitted to indicate the distribution is for a SEPP (although even with this info the trustees aretypically not coding the 1099 as eligible for exclusion from the 10% early withdrawal penalty, you”ll have to file a 5329 form to address that). If you want professional help look for a CPA with expereince in this area.
> Would I be better of to use my 401k if I retire later this year – or use my IRA?My IRA account is much larger than my 401k.
One of the key issues in setting up a SEPP is partitioning funds appropriately between those inculded in the “SEPP universe” and those excluded. This is particularly important in your case being so close to age 59 1/2.
Again, I would highly recommend looking at other alternatives before commiting to a 5 year SEPP plan. 2007-03-02 12:44, By: John, IP: [71.208.231.158]

L2: remaining paymentsWe are going to have a problem with 2 different questions under the same “subject”. The other question by a responder should be posted as its own unique topic.
Once you have completed the 5 year period and are 59 1/2, you can take any amount from -0- to 100% of your balance, depending upon your needs and tax picture.
The other scenario for someone 58 should use his 401-k once he “separates from service”. There is no need to set up a SEPP 72-T for distributions at that point, because it qualifies for one of the special exceptions to avoid the 10% penalty for withdrawals from 401-k accounts or company retirement accounts, but not for IRAs. Assuming the 401-k is enough to carry you until 59 1/2, then you can take any amount, or varying amounts, whenever you want, without setting up a SEPP 72-T, and without any 10% penalty or 5329 form.2007-03-02 20:45, By: dlzallestaxes, IP: [4.175.9.1]