SPIA VA Combo
L1: SPIA VA ComboTurning 54 years old in December. Have apprx. $874,000 in my retirement account. I am wondering if I can take a $40,000 taxable/penalty distribution (pay off debt)? Rollover another $60,000 to an IRA (Safety net). Thenin my 72t universe put$324,000 into a 10 yearimmediate annuity and $450,000 into a variable annuity.Thepayments would be under the 72t calculation and I would defer the variable until after I am 59 1/2. Iwould only use the $774,000 to calculate my 72t distribution? I am getting mixed advice on the immediate annuity only being a 10 year?2009-09-10 00:50, By: Ron, IP: [220.127.116.11]
L2: SPIA VA ComboThe most important fact that you omitted is “how much do you need/want annually”? That should determine how much you must put under the SEPP 72-T plan calculation, and set aside into a separate account or accounts. Then you could put the balance in another IRA for emergencies.
I assume you do not have a 401-K/403-B or will not be separating from service from your employer at any time in 2010. Otherwise you could avoid the SEPP 72-T approach if your employer’s plan allows distributions. If so, then there would be no 10% penalty for early distributions starting at any time in the year you will become 55 (i.e. 2010) after you separate from service in 2010 ( even if you separate in Jan 2010, and won’t be 55 until Dec. 2010).
Also, what do you mean ” I’ll defer the variable annuity until after 59 1/2″ ?
Also, if there are employer securities in your employer’s retirement plan, then check on the “NUA COST BASIS” with your employer. explain what types and amounts you have in various kinds of retirement account.2009-09-10 02:51, By: dlzallestaxes, IP: [18.104.22.168]
L2: SPIA VA ComboYou can do as you outlined. The best approach is to find an IRA custodian that uses a custodial account approach.
The account would contain all $774,000. The annuity would then be purchased as an investment from that account and the annuity payments would be paid back into the IRA account (not directly to you).
You may be creating a red flag with the extra $40k so make sure that you take the extra $40k before establishing the SEPP. Keep really good records so that you can prove that it occured before the start date of the SEPP.
2009-09-10 10:15, By: Gfw, IP: [22.214.171.124]