Stub year Question.

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L1: Stub year Question.Hi all,
I plan to start my SEPP this month to take advantage of the 3.27% interest rate. Since I really don’t need the money until 2011 (when I origionally was planning to start my plan) I plan to take a stub year (5 months) distribution this year.
Another avantage is I turn 59.5 on Aug 3, 2015. (DOB: 2.3.56)
If I start the SEPP this month my 5 years will also expire in Aug 2015.
So I think I can do the following?
2010 – Aug – Dec (5 month stub year distribution.)2011 – Full year distribution.2012 – Full year distribution.2013 – Full year distribution.2014 – Full year distribution.2015 – Jan – July (7 month stub year distribution.)
(Total 60 month distribution)
and AFTER Aug 2015 I would be free to withdrawl any amount or not withdrawl anything.
2010-08-11 20:41, By: Bob85364, IP: []

L2: Stub year Question.Start with our first modification date calculartor at
Does it agree with your calculations?2010-08-11 21:00, By: Gfw, IP: []

L3: Stub year Question.If you do not need the money in 2010, why not wait until Dec 2010 to start it. Then you wil have only 1 month in 2010 to add to your other 2010 income, or wait until Jan 2011. That way you will defer the 5 months of income from 2010 to 2015, when you will probably have lower income, and possibly a lower tax bracket. I’m not sure that tax rates will increase on any but the highest tax brackets in the future.
I do not think that the little change in interest rates between now and the end of the year will make it better to start now vs Jan 2011 when you consider my comments above.2010-08-11 22:00, By: dlzallestaxes, IP: []

L4: Stub year Question.Your original question was in regards to your final stub year option. If you start your plan this month, you can do exactly as you posted, ie take out 7 months of distributions in 2015, since that will produce the required 60 months of distributions necessary with your particular modification date.
If you need more money in 2015, you can also take out a full annual distribution prior to your mod date. The fact that you may elect a pro rated distribution this year for your first stub year does NOT limit you to only the pro rate option for 2015, but you cannot take out less than 7 months in 2015 due to the 60 month minimum.
The other posts certainly provide other approaches for you to consider as well.

2010-08-12 01:12, By: Alan S., IP: []

L5: Stub year Question.Thanks Gordon, DLZ and Alan.
Just wanted to make sure I had my logic concerning the 2010 and 2015 stub years correct.

Thanks again. Bob B.
2010-08-12 20:46, By: Bob85364, IP: []