Timing of Starting 72T Distributions

L1: Timing of Starting 72T DistributionsCan I start the 72t distributions anytime after leaving the company I am working for (and have the 401k with) or do I have to start this immediately upon leaving? Example – Can I start the 72T distributions 3 years after leaving? Thanks2009-09-29 11:29, By: Fred11, IP: [165.170.128.65]
L2: Timing of Starting 72T DistributionsI believe that it must be started within the same calendar year.2009-09-29 15:48, By: dlzallestaxes, IP: [72.78.110.230]

L2: Timing of Starting 72T DistributionsAre you planning to take 72t distributions from your 401k plan or from an IRA into which you have rolled over your 401k plan? If from an IRA, you can start distributions at any time.
Most people roll over their 401k plan money into an IRA and then take 72t distributions from that. The investment choices tend to be much better and it is a simpler and more straightforward procedure.
There are a lot of other factors involved here, such as your age in the year you separated from service, whether or not your 401k plan allows partial distributions, whether or not your 401k plan contains highly appreciated company stock, etc.2009-09-29 17:44, By: Ed_B, IP: [98.246.95.248]

L3: Timing of Starting 72T DistributionsEd is correct. You can start 72t distributions any time you wish.
However, you should first determine if you qualify for the age 55 separation exception to the penalty and if the plan will provide flexible payments until you reach 59.5. That would enable you to avoid a 72t plan.
But once you have explored all the options you have with respect to your retirement plans, you can start a 72t plan at anytime. Just be sure that all assets from the 401k have been rolled over and that there are no trailing dividends, company matches etc before starting your plan.2009-09-29 19:03, By: Alan S., IP: [24.116.165.60]