So far, so good
L1: So far, so good
I’ve been following www72tnet since about 2004, when my wife and I were moving permanently to Australia. After doing quite a bit of research, it became apparent we would have to leave our 401k’s/403b’s in the US, or lose most of it in taxes and penalties.
Rule 72(t) seemed like the best solution to eventually get paid out.
We both wanted to start SEPP’s as soon as we reached 55, so the first step was to get my wife’s 403(b) moved to a traditional IRA, since the 403(b) trusties were difficult to deal with and had no online access. I found that Fidelity, who handled one of my
401k’s, made it easy to start a rollover IRA online, and even had a SEPP distribution form on their site. I finally got her 403b rolled over before December 31, 2009 so we would have a balance to work with for the SEPP. My wife turned 56 in 2010, and we used
the February 2010 rate of 3.39% in the form we sent to Fidelity, first payment March 1, 2010. (Amoritization method)
2010/2011, I started consolidating my 401k’s into a rollover IRA with the goal of having a singe balance before December 31, 2011 The 401k that was already with Fidelity was easy, I was able to do the rollover completely online and the zero balance 401k
is still visible when I log on. With the other 401k, held by JP Morgan, I was able to open a rollover IRA online with them without too many issues. I even ended up with a non-taxable portion, which I decided to take in cash. Nice. Since the JP Morgan IRA didn’t
seem to have any forms for SEPP, and didn’t seem to understand what I wanted to do, I simply rolled it over to the Fidelity one. I turn 55 in 2012, used the 1.53% rate on my form, and got my first payment in January, 2012. (Amoritization method)
The only real issues are that Fidelity will only put down distribution code 1 on the 1099R, so I have to remember to file form 5498 each year.
Also, I’ve kept the IRA investments fairly conservative, as my goal is to preserve value as much as possible. Dividends and capital gains history were important, and as a result my wife’s IRA is still about $2,500 more than when she started the SEPP even
after nearly 2 years of withdrawals and a couple of GFC’s. My own IRA has also gained more than the first distribution.
I would just like to thanks the people at www72tnet for all the valuable information and encouragement they have provided, the calculators, the articles, etc. Because of you guys and other like minded people on the net, I had the confidence to do all of
this, and finally start getting some of our retirement funds, when it initially seemed a bit overwhelming.
2012-02-09 10:46, By: PM, IP: [220.127.116.11]
L2: So far, so good
Glad to hear that all is going well – proper planning always seems to pay off in the long run.
BTW… Thanks for the kind words and comments about the 72t.Net website
2012-02-09 11:31, By: Gfw, IP: [18.104.22.168]
L3: So far, so good
If your wife was working in 2009 and separated from service in 2009, she could have avoided even using a SEPP 72-T if her employer’s plan allowed for partial withdrawals. 403-B plans have the same exception as 401-K plans in this regard, so long as the plan
allows it, but if she separated in a year prior to becoming 55, then your approach was the best one.
2012-02-09 20:24, By: dlzallestaxes, IP: [22.214.171.124]
L4: So far, so good
Thought about that, but we were 48 and 49 when we finished our jobs in the US, so we didn’t have that option.
2012-02-09 21:22, By: PM, IP: [126.96.36.199]