What does the “cost to bust” column mean

L1: What does the “cost to bust” column meanI need enlightened as to the cost to bust column on the calculators. Can you intentionally bust a 72T agreement or can interest earnings not being enough bust the 72T. 2004-06-23 14:37, By: MarthaWashington, IP: [65.54.97.146]
L2: What does the “cost to bust” column meanStart by looking in the help file by clicking on the help button below the calculator. Running out of money in a SEPP will not but theSEPP – also reviews Rev.Rul. 2002-62which can be found in the left menu2004-06-23 15:17, By: Gfw, IP: [66.73.165.39]

L2: What does the “cost to bust” column meanHi Martha:
When we speak of “busting a plan” in SEPP / 72(t) terminology, it means you have done somethingthat causes penalties and interest to be assessed. For example, if you use an interest rate assumption that exceeds the 120% factor when setting it up, or make a one-time withdrawal in excess of the maximumannual amount allowed, or one of the other things specified,then you have “busted” the plan. The calculator is telling you what the estimated cost in penalties and interest will be.
As far as “intentionally” busting a 72 (t) is concerned, sure you can do that, but be ready to pay the tax man. When you say “… interest earnings not being enough…” I assume you mean what happens if your accounts underperform and go to zero. The good thing is that if this situation happens, then you haven’t “busted” the plan and no penalties or interst are due. The bad news is you’re broke!
Hope this helps.
Jim2004-06-23 15:19, By: Jim, IP: [68.225.115.136]