# SEPP exact formula for maximum payment without Penalty

L1: SEPP exact formula for maximum payment without Penalty

Hello

It is my Intension to start collecting My SEPP Beginning early January 2019

I am not fully understanding the formula, Maybe You could help Me

Lets assume for the sake of easy math that I have :

$1000000 in IRA

Age 54 , turn 55 in July 2019

I would like maximum payment for Now I have other resources in Future.

I was going for 66k when My investment was at 1.1M now I am down to about 1.0M

They are telling me about 57k is what I can get, Can someone give me the exact

formula Please and the FED rate Etc., and what investment percentage means

I think it means you expected rate of return on your existing account ?

I will be looking forward to a clear answer.

Thanks

2018-12-14 15:44, By: High Tech Red neck , IP: [75.74.81.92]

L2: SEPP exact formula for maximum payment without Penalty

Please provide you date of birth and the approximate date of the first distribution.

The SEPP rate will change based on the starting date which is the date of the first distribution. Please see our interest rate section for current rates.

The investment rate is only for illustrative purposes and has nothing to do with the calculation of the distribution.

For the exact formula, I don’t teach math. However, you should be able to find by doing a Google search. The tables are published in IRS Pub 590 and are based on your attained age as of 12/31 of any given year.

If the plan were to start in January, your maximum distribution would be $55,937.04 using an attained age of 55 as of 12/31 in 2019.

2018-12-14 16:22, By: Gfw, IP: [73.217.141.7]

L3: SEPP exact formula for maximum payment without Penalty

If your funds are already in an IRA, then disregard this response.

If your retirement plan is now in a 401-K, and you are planning to transfer it to an IRA in order to set up a SEPP, then stop. Read the other postings on this site about the 401-K option. Also, if the 401-K plan has company stock, then read about the NUA provision of the tax code.

2018-12-14 16:36, By: dlzallestaxes, IP: [173.59.46.223]

L3: SEPP exact formula for maximum payment without Penalty

If it would not be a tax issue in 2018, and if you could get the paperwork done very quickly, you could take the full annual distribution before 12/31/2018. That would give you about $ 56,000 immediately. While that is $ 10,000 less than the $ 66,000 you want each year, this “extra” distribution will be available to supplement your lower annual distribution for the next 5 1/2 years, which will get you to age 59 1/2 – 60. Then your plan will end, and you will be able to take any amount thereafter.

2018-12-14 16:44, By: dlzallestaxes, IP: [173.59.46.223]

L4: SEPP exact formula for maximum payment without Penalty

That is a very creative and great suggestion but It would affect me in 2018 because I was not working and took low cost healthcare and unemployment so I would owe money maybe more then 10k + taxes.

Great thought though, Thanks

2018-12-14 17:11, By: High Tech Red neck, IP: [75.74.81.92]

L5: SEPP exact formula for maximum payment without Penalty

I suggest that you have an accountant run the figures with a computer. In 2018 the Standard Deduction is $ 12,000 single or $ 24,000 married filing jointly. The 10% tax bracket is up to $ 9,525 single, $ 19,050 married. If you were unemployed, you might have a lower tax anyway.

By the way, did you look at the other exceptions for Unemployed Health Insurance or Medical Expenses that you can take from your IRA without the 10% penalty ? You may be in a very low tax bracket if all you had was Unemployment Benefits.

2018-12-14 20:58, By: dlzallestaxes, IP: [173.59.46.223]

L3: SEPP exact formula for maximum payment without Penalty

Date of birth July 16th 1964

Current Age 54

55 in 2019

First distribution will be Early January 2019

Thank You

2018-12-14 17:04, By: High tech Red Neck, IP: [75.74.81.92]

L4: SEPP exact formula for maximum payment without Penalty

Then my earlier calculations were correct.

2018-12-14 21:50, By: Gfw, IP: [73.217.141.7]