Using 0% interest rate

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L1: Using 0% interest rateFirst I wish to thank everyone for all the valuable information on this site and in the postings and to GFW for all the hard work to maintain the site. I think this was discussed before, but is it valid to use a 0% interest rate in calculating a 72T plan? I plan to use annual recalculations and may need a variable amount for year to year, it seems to me a 0% interest rate would give me the same result as switching to the Minimum Dist Method with the option of increasing it on the next annual recalculation. I did notice the following calculation using 0% interest shows the Annuitization Method is lower than the Minimum Dist Method, is it valid to use this lower amount? (Age 55, 500K @ 0% interest)$16,891.89 [$1,407.66/mo]

1] Minimum Distribution Method

$16,891.89 [$1,407.66/mo]

2] Amortization Method

$16,569.46 [$1,380.79/mo]

3] Annuitization Method
2009-02-01 17:26, By: bob85364, IP: []

L2: Using 0% interest rateZero percent is a valid interest rate. However, if you are going to do annual recalculation, then it probably won’t work – you have to definehow the interest rate will be determined on an annual basis – once defined, you have to stick to the formula as initially defined.For annual recalculation you must recalculateusing age, interest rate and balance. Take a look at the sample form that we have posted at…use the maximum interest rate that you can, use the reverse calculator to determine the amount you need and then divide the IRA. In the future you will have a fund for emergencies and/or a fund to create a new SEPP if more income is needed.2009-02-01 17:39, By: Gfw, IP: []

L3: Using 0% interest rateGordon, Thanks for the clarification!! 2009-02-01 18:06, By: bob85364, IP: []