rmd offset because of 72t

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L1: rmd offset because of 72tI started a 72t withdraw in 1998. It has stayed a constent $13747 per year. This come up to about$137470. My question is. Can this amout which was distributed to me be used to offset any required rmd’s? Thank You2009-11-05 15:44, By: Gus, IP: []
L2: rmd offset because of 72tHello, Gus:You don’t include much info in your post but I will take a generic stab at answering your question. From what I have read, the purpose of the RMD is to get money out from under its tax shelter and allow the government to get revenue that has been deferred. This tax deferral is allowed and also encouraged by government but they do not want it to go on forever. There must be a way to limit the tax shelter and the RMD process is that way.That said, RMDs do not begin until a person turns 70 1/2 years of age. If you are younger than this, then the RMD does not affect you. If you are approaching this age and asking this question because of it, then I would think that any money you are removing from an IRA would reduce the RMD requirement. It would be reasonable that if, for example, your RMD calculated out to $15,000 per year and you are already taking $13,000, you would need to distribute an additional $2,000 to meet the RMD.In my case, I am distributing more than the RMD requires and will likely continue to do that until I reach age 70 1/2 in about 10 years. Because I am already distributing more than the RMD, I should not need to make any additional changes in my distributions.Please understand that by the time that RMDs come into play, the need for a 72t has long since passed. Also, I am not a tax expert by any means. I am very interested in personal finance and retirement planning and have read quite a bit about them. Still, we do have some real experts in this on this web site and I am sure that they would be more than happy to correct me, if necessary, and also to add their own comments.2009-11-05 17:27, By: Ed_B, IP: []

L3: rmd offset because of 72tEd covered your question very well. As you probably determined, the short answer to your question is “No”, you do not get a later credit against your RMDs at age 70.5 for your 72t payments, including those calculated using the “RMD method”.All this said, since you have taken 137,000 out of your IRA, when you reach 70.5 you will have 137,000 less (plus earnings on that 137,000) in your IRA than you otherwise would have. If these distributions reduce your IRA by 25%, then all your RMDs starting at 70.5 will also be 25% lower than otherwise. That might mean that less of your SS income will be subject to taxation.As Ed indicated, your 72t plan will stop long before RMDs must begin, so be sure you understand when you can stop your plan. The latest possible age for a 72t plan to exist is 64.4 because the person might have needed money just prior to 59.5 and decided to go through with the plan. That would be unlikely, but conceivable.If we did not answer your question, please advise.2009-11-06 04:04, By: Alan S., IP: []