Setting up a new sepp
L1: Setting up a new seppi am setting up a new sepp. I’m planning to move some money from a 401k to an Ira around October and I’m planning the first withdrawal next year. I’ve not yet decided on annual withdrawals are monthly. Anyway, I’d rather keep this as inexpensive as possible. Are people using the calculators online to calculate this. I’d rather not spend money needlessly. I recently got a divorce which is making this necessary. my date of birth is April 8, 1964.2015-09-03 23:32, By: Charjenk, IP: [18.104.22.168]
L2: Setting up a new seppThere is a free calculator on this site to use.
Also the MS Excel function works too. Just make sure you use the correct variables.2015-09-04 13:57, By: brkr12002, IP: [22.214.171.124]
L3: Setting up a new seppThe actual SEPPcalculationwill not be possible until a newer 120% fed mid term rate is issued that includes the month you will take first withdrawal, so for now, if you use the calculator on this site, you will be getting an estimate using one of the current month rates. Best to isolate the SEPP balance into the IRA so you have that beginning balance value to use in the calcs as well, if first withdrawal will be done early in 2016. Otherwise, you should probably use the 12/31/2015 IRA balance in your calcs next year.2015-09-04 15:41, By: Ken, IP: [126.96.36.199]
L4: Setting up a new seppIf the financial settlement for the divorce has been fully concluded, your potential plan will not be affected. But if there is any pending QDRO or division of your IRA accounts such that changes could occur after you start your SEPP, the implications on your plan are problematic. There have been some inconsistent IRS rulings over the last decade, but it still is not totally clear which assumptions have the least risk to your plan when it is affected by a settlement.2015-09-04 21:34, By: Alan S, IP: [188.8.131.52]
L5: Setting up a new seppThe divorce is final and there will be no division of Ira’s in the future.
Another question, I read that you calculate the required minimum distribution as of the account balance on Dec. 31. What if that is not possible to use that date this year. My funds are in a 401k right now so that’s why I’m starting distributions next year. Is it cool to make it the account balance on October 31?2015-10-23 20:16, By: Charjenk, IP: [184.108.40.206]
L6: Setting up a new seppNo. If you are going to roll the 401k to an IRA, you cannot use an account balance prior to the rollover. For the IRA account you use for the SEPP, you must use a balance after any non SEPP distributions or contributions have been added, ie no activity between the date of the account balance and your first SEPP distribution. The balance must also be a reasonable representation of the current balance. While not defined, you should be OK as long as the balance you select is not more than 15% different from your value when you order the first SEPP distribution.2015-10-23 20:42, By: Alan S, IP: [220.127.116.11]
L7: Setting up a new seppI am actually planning on using a date after I move the funds from the 401k. It would just be nice to get some funds this year prior to next year. it would also make for a nice Christmas bonus this time of year.2015-10-23 21:55, By: Charjenk, IP: [18.104.22.168]
L8: Setting up a new seppI would check with your tax advisor on the tax aspect in 2015 vs 2016. Since your divorce is already final, you must file as SINGLE for 2015. If you might get re-married in 2016, your tax rates could be lower in 2016.
Taking a large distribution in either year could push you into a higher tax bracket. If you are paying alimony, then this would be tax deductible.2015-10-23 22:17, By: dlzallestaxes, IP: [22.214.171.124]