Traditional vs rollover IRA

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L1: Traditional vs rollover IRAWhen I retire, I will be taking a lump sum pension payment,transferring it directly to an IRA, and applying the 72t SEPP. Is there a difference between a traditional IRA and a rollover IRA for this to work correctly? Must it be a rollover IRA?
I will be leaving my 401k with my employer for the time being.
I am 57 years old.
thanks,
Mike V2012-06-16 15:06, By: Mike V, IP: [173.61.83.30]

L2: Traditional vs rollover IRAMike…
At 57 (maybe 58 depending on your date of birth) you will be tying up your funds for 5 years from the date of the first payment with a SEPP plan.
You might be better off – if your 401(k) plan allows partial withdrawals – to fund the next few years from the 401(k) and leave the IRA until after you reach age 59.5.
For SEPP purposes, there is no difference between a traditional IRA and a rollover IRA except as to where the funds originated.
2012-06-16 15:28, By: Gfw, IP: [205.178.67.189]

L3: Traditional vs rollover IRATo expand on gfw’s response, at 55 or older, if you separate from service, you are allowed to take distributions from your 401-k (if your plan alloes it) without being subject to the 10% early distribution penalty before 59 1/2. These 401-k distributions can vary in amounts and frequency, whereas the SEPP 72-T locks you into a fixed 5-year plan at a fixed annual amount.
I suggest that you review your situation and plan with a professional.
Also, if there is company stock in your 4-1-K or pension, ask HR about the NUA cost basis, and plan accordingly with your professional.2012-06-16 18:48, By: dlzallestaxes, IP: [71.175.95.64]