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: [98.145.25.44]

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 http://72t.net/Sepp/Irc72tSampleForm.aspxSuggestion…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: [216.80.125.206]

L3: Using 0% interest rateGordon, Thanks for the clarification!! 2009-02-01 18:06, By: bob85364, IP: [98.145.25.44]