Top 20 Questions To Ask Yourself

L1: Top 20 Questions To Ask YourselfI developed the following list over the weekend. Additions are welcome. Every potential SEPPer should be able to say that they are knowledgeable about all 20 questions & have addressed all 20 before ever taking the first distribution.1. How does my SEPP plan fit with my overall current financial picture?2. How will my SEPP plan fit with my projected financial picture several years into the future?3. Have I left extra IRA money on the side as “dry powder” for future known and unknown events?4. Have I designed a very safe, moderately safe, or risky SEPP program from an IRS perspective? What have I done to mitigate these risks, if necessary?5. Have I correctly structured my IRA accounts before taking the first distribution?6. How do plan to invest the assets in the underlying IRA? 7. Is the investment program for the IRA consistent with my financial objectives? 8. Have I designed an investment program to reasonably insure that the assets will last: to the later of age 59 _ or 5 years; for my lifetime?9. Do I understand my own investment risk tolerance and have designed an IRA investment program that will permit me to sleep at night?10. Have I documented my SEPP program in a contract to myself?11. Do I clearly understand the risk trade-offs between a single SEPP calculation and annual recalculation?12. Is my annual withdrawal more or less than 4% – 5% of my total invested assets?13. Is “separation of service at 55” applicable to me and am I planning to use it?14. Are “net unrealized appreciation” rules applicable to me and am I planning on using them?15. Do I know how to report my SEPP distributions on my federal tax return?16. Does my state offer any tax breaks on SEPP distributions?17. Do I clearly understand that acts of others: custodian, trustee, accountant are really my acts and that I am the only one responsible for the proper execution of my SEPP plan?18. Have I computed the penalty tax & interest for the absolute worst timing condition and know how to handle it?19. Have I done a thorough job of federal tax bracket planning?20. Is my spouse or significant other involved in this planning process & does (s)he agree & understand?21. Have I measured at least three times & cut only once?2002-08-12 10:41, By: TheBadger, IP: [127.0.0.1]
L2: Top 20 Questions To Ask YourselfBadger, could you elaborate on question #13 about the separation of service at 55, please. I believe this gives you access to your 401k without penalties, but how exactly does that work?Thanks!2002-08-19 08:40, By: teknchuck, IP: [127.0.0.1]

L2: Top 20 Questions To Ask Yourself”Separation of Service At Age 55″ is defined by IRC 72(t)(2)(A)(v); right next door to SEPPs which are defined in 72(t)(2)(a)(iv). To qualify: 1. You must separate from sevice (quit, laid off, fired) from your employer during the year in which you attain age 55. You need not actually be 55 when the separation occurs; just 55 by years-end.2. You must keep the assets in question in your employer’s plan; you can not roll those assets into an IRA as this exception does NOT apply to IRAs; just qualified plans.3. This exception only applies to assets in the qualified plan sponsored by the employer you just left; thus assets in plans from employers two or more before are ineligible; thus, if you plan to use this exception, get all of your 401(a) & ʤ401(k) assets rolled forward into your then employer before you leave.Meet these requirements & you can withdraw whatever you want whenever you want from the plan assets without penalty.One last item, this process of taking money out of, let’s say your 401(k), are called periodic withdrawals. Not all plans support periodic withdrawals as they are a bit of a paperwork hassle. Check with your plan administrator.TheBadgerwjstecker@wispertel.net 2002-08-19 08:52, By: TheBadger, IP: [127.0.0.1]