small withdrawals

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L1: small withdrawalsI understand why the majority of 72t users would be interested in maximizing withdrawals….but is there any reason limiting someone from arbitrarily taking a smaller SEPP than either of the three formulaes allow? In other words, if the three formulaes allow me to take say, $13,000…..$15,000….and $14,000 each year…could I just take $10,000 if that’s allI need, so long as I do this for each year of course???2009-11-09 01:06, By: Gerry, IP: [76.101.161.103]
L2: small withdrawalsNo, you cannot take a lower figure than the calculations generate. If you want $10,000 for your distribution in this example, partition the IRA into two IRA accounts with one of them carrying a balance that will produce the $10,000 you want.You could also depress your interest rate so that the calculations yield a lower number. However, you will have more flexibility if you always use calculation variablesthat produce the highest distribution per dollar of account balance. You will then have more dollars to partition into another IRA account that is NOT part of your plan and can be used for emergency needs to save your plan or even to start another plan later on.2009-11-09 01:19, By: Alan S., IP: [24.116.165.60]

L2: small withdrawals
Gerry:

Alan posted some good advice on this topic, as usual.

When I started my SEPP in 2005, I did not need the max amount that could be distributed from my IRA, so reduced the interest rate in the amortization calculation from 4.6% to 4.0%. This seemed simpler to me and I did not need a 2nd IRA for penalized distributions. I had other resources that could be called upon in an emergency. Either of these two approaches will work, so choose the one that gives you the flexibility or simplicity that you need.2009-11-09 18:22, By: Ed_B, IP: [71.236.183.224]