Starting plan in April
L1: Starting plan in AprilHello,
Forgive me if my question has been discussed, I searched but couldn’t find where it was.
I plan on beginning a 72t plan with the first distribution on, or about, April 10 2013. Below are the details:
Date of Birth: April 27, 1959
IRA balance: $900,000
1st modification date: October 28, 2018
Annual SEPP: $35,985.04
Monthly distribution: $2998.75
My question is this: Can I take a distribution in the amount of $11,995.00 ($2998.75 X 4) in April then $2998.75 monthly beginning May 2013 and every month thereafter (total $35,985 in 2013)? William Stecker’s book leads me to believe I can but I wanted to double check. Thanks.2013-03-01 20:58, By: Phil H., IP: [22.214.171.124]
L2: Starting plan in AprilYes.
You actually have several options :
1. You can tax $ 35,985.04 in any way that you want in 2013, all whenever you start.
2.As you stated by taking $ 11,995 (4 x $ 2,998.75) initially in April, and then monthly for 8 months @ $ 2,998.75 (= $ 23,990), or $11,995twice (=$ 23,990), or $ 7,996.67 three times (like June, Sept, and Nov = $ 23,990), or $ 5,995 four times ( likeJune, Aug, Oct, and Dec = $ 23,990).
3. Or take only 9/12 of $ 35,985.04 = $ 26,988.78.
It depends upon your cash flow needs, andyour 2013 tax situation.
Also, no matter your frequency or amount of each payment in 2013, you can change your frequency and amountin 2014 and future years based upon your needs, so long as you take $ 35,985.04 during each calendar year, until the year that tour plan terminates, in which case there are likewise several options.2013-03-02 01:41, By: dlzallestaxes, IP: [126.96.36.199]
L3: Starting plan in AprilThank you very much for your reply.2013-03-02 02:00, By: Phil H., IP: [188.8.131.52]
L4: Starting plan in AprilPhil,
After doing a lot of research on this site, I did exactly that with my 2nd SEPP that I started in May 2007, when Iinstructed the custodian to give me the equivalent of 5 monthly payments as my first “payment” in May, and then start usingthe real monthly paymentin June.I worked just fine, and is allowed in first year.KEN2013-03-31 18:19, By: Ken, IP: [184.108.40.206]
L2: Starting plan in AprilI might have messed up my 72t plan already. In April I took a lump payment of $5997.50 then instructed my custodian to begin automatic monthly payments of $2998.75 in May. In addition to the automatic payments in May and June I planned on taking two manual payments of $2998.75 each (one in May and one in June). All this, with monthly payments for the remainder of the year, would total $35,985 which is the annual amount I need to withdrawal.
Something Jim F posted in a recent post makes me believe that I can’t do this. Is this okay or did I bust my plan already because I had my custodian begin monthly payments before I took the extra lump payment(s)?2013-05-08 15:57, By: Phil H., IP: [220.127.116.11]
L3: Starting plan in AprilIt seems ok to me :
$ 23,990.00 ( 8 @ $ 2,998.75)
1 @ $ 2,998.75 = $ 35,984.95
I think you might be confused by a posting about someone who wanted to change the METHOD/CALCULATION to REDUCE his annual payment. Jim was just warning that the distributions already taken in 2013 might exceed the new annual figure he wanted to change to.
That is not your situation.
2013-05-08 16:11, By: dlzallestaxes, IP: [18.104.22.168]