Seperation from Service

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L1: Seperation from ServiceGentlemen,
I have finally seperated from service, and am collecting unemployment until my pension goes into effect on 6/1/2012. I’m going to roll over $277,000 into a traditional IRA from the Carpenters union, and create a SEPP to provide additional income to supplement my pension hopefully to start 9-1-2012. I will take a full years distribution. Please let me know if I’ve got this right?
Age 52 10-25-1960 (plan year)
Spouse 9-17-62 (don’t see any bearing here)
Interest (hopefully) 1.30%
Total $8223.46 per year
Monthly $685.29 (within 2 cents of total $8223.48) is this ok?
If interest rates are to rise substantially in the future could there be a recalculation?2012-03-15 12:48, By: Scott, IP: []

L2: Seperation from ServiceIf I use DoB of 10-25-1960, $277,000 as a starting balance and 1.3% as the interest rate, I come up with an annual distribution of $10,556.81 (see below) using the amortization method.
Where did you get $8,233.46?
The plan year starts with the date of the 1st distribution.
In terms of annual recalculation, read the following…

SEPP Plan Assumptions

Owner Born

Plan Age

Total IRA Accounts

SEPP Plan Account

SEPP Interest Rate

Investment Interest Rate

1st Distribution Date

Date Age 59.5

5 Year Date

1st Modification Date

2012-03-15 18:04, By: gfw, IP: []

L3: Seperation from ServiceThank you for your response GFW. My error was in checking the use uniform table box. I prefer your correction, and it will make a big difference in our comfort.
The only difference I see in your post is my beginning date. I can’t start the rollover until I receive my first pension check which should be 6/1/2012.
I was planning on using Fidelity as my custodian. Any comments on them?
Also, how close must I be at the end of the year? Can I be 5 cents off?2012-03-15 19:17, By: Scott, IP: []

L4: Seperation from ServiceNo personal experience with Fidelity, but they are probably like most other custodians – they will manage your money, but want no part of the SEPP. What that means is that you may have to file a IRS Form 5329 with you 1040 – no big deal.
Make sure that you read through our planning pointers for some helpful hints.
I just used the default date, your date and my date will result in teh same annual amount.
Please feel free to post any additional questions or comments and good luck on your SEPP
2012-03-15 20:05, By: Gfw, IP: []