Separation of $$ amount out of an IRA for 72t dist

L1: Separation of $$ amount out of an IRA for 72t dist
Question 1:
If a client already has an existing IRA and wishes to set up SEPP, are they required to segregate the desired amount out of the IRA to calculate the payment and begin distributions, or can they just begin 72t distributions out of the existing IRA as long as the entire amount of the IRA is used to calculate the payment?

Question 2:
Aclient has 2 existing IRAs, only one has 72t distributions coming out of it, and he is moving both IRAs to a new dealer. Can the dealer combine the 2 IRAs into a single IRA allowing the 72t distributions to continue out of the new combined account?2008-01-30 07:48, By: JCP, IP: [207.144.72.249]

L2: Separation of $$ amount out of an IRA for 72t dist#1 = If the total IRA Account Balance isused for the SEPP, then it is already seperated.
#2 = No
2008-01-30 07:58, By: Gfw, IP: [216.80.125.206]

L2: Separation of $$ amount out of an IRA for 72t distHello JCP:
1. They do not need to segregate the SEPP IRA into a distinct IRA; however, if that si the desired result, then it must be performed before distributions begin.
2. NO.
TheBadger
wjstecker@wispertel.net

2008-01-30 08:00, By: TheBadger, IP: [72.42.66.180]

L2: Separation of $$ amount out of an IRA for 72t distJCP,Q1– If not all of the IRA is needed to fund the SEPP plan, make it in to two IRAs before starting SEPP, and keepthe other IRA for emergency withdrawals if needed, so only that withdrawal has the 10% penalty and it does not “bust” the SEPP IRA, because a “bust” would make10% penalties and interest apply to all SEPP withdrawals to date. In addition, if the SEPP has to run past age 59 1/2 to cover the 5 year minimum, the 2nd IRA is then available after 59 1/2 for “penalty free” withdrawals if more cash is needed in any year.I started out with 3 IRAs before setting up a SEPP on first IRA in early 2006. In May 2007 I started a second SEPP using 2nd IRA to fund the payments on a second home webought at the shore. Istill have the 3rd IRA for emergencies or for after turning 59 1/2, since my firstSEPP has to run until I am 61. KEN2008-01-30 16:07, By: Ken, IP: [75.67.65.254]

L2: Separation of $$ amount out of an IRA for 72t distRe Q 2 – the pertinent point is whether the72t calculation is based on the account balance of both IRA accounts rather than which one of them happens to be the source of distributions. While you probably mean that only one of them was used in the original calculation, but if BOTH were included, then they must both continue to be included regardless of the IRA custodian or if therewere different IRA custodians.
I certainly would be sure the new dealer is aware of which account is the 72t account or if both of them are considered part of the 72t plan. If BOTH were included, the new dealer could then combine them, if both were not, they cannot be combined without busting the plan.
2008-01-30 22:54, By: Alan S., IP: [24.116.165.60]