What”s my SEPP account?
L1: What”s my SEPP account?I started a 72(t) last year from an IRA held at American Century. This year I did a rollover of a 403(b) account at Scudder into an IRA also at American Century. Currently the 403(b) rollover funds are in a money market account separate from the original IRA. My question is: since all the IRA funds (original rollover) are now held by American Century do they constitute a single IRA account? I”d like to distribute this year”s SEPP from the money market account, which holds the “new” funds, rather than from the original IRA which is in a balanced fund. Thanks.2008-07-05 08:51, By: JD_Bugs, IP: [184.108.40.206]
L2: What”s my SEPP account?You can”t do that without starting a second independent SEPP plan using the rollover IRA.A SEPP plan accounting is done per account, not per custodian. Therefore, the fact thatAmerican Century holds both IRAs is actually immaterialother than making what you decide to do easier to execute.
Ifyour postis driven by just not wanting to sell the balanced fund shares because the market is down, but your SEPP payment amount is OK, why not just sell the balancedfund shares in theSEPP andput them in a MM fund. Thenreplace the MM funds in the rollover IRA with a repurchase of the balanced fund. These are probably no load funds so there may be no transaction costs to do this. Then you just continue your SEPP with the original account, but now you are selling the MM to fund you distributions.
If American Century requires a separate IRA account for each fund, the above process will be more complex because you would have to do a complete transfer to2 totally new IRA accounts, with your SEPP transferring from the current accountholding the balanced fund to a new IRA account holding the MM fund.
With either approach, make sure AmericanCentury realizes what you are doing and that you have a SEPP that you do NOT wish to bust in order to accomplish the investment changes. If this is not clear, please post additional questions.2008-07-05 10:10, By: Alan S., IP: [220.127.116.11]
L2: What”s my SEPP account?Alan S.Thanks for your excellent response. My reason is exactly as you guessed. I”d rather take the SEPP distribution from the MM account since the market is down. As I understand (and please correct if necessary) if I take the distribution from the original IRA then re-purchase shares using funds from from the new rollover IRA to replace these, all will be ok with the IRS. This seems simple enough unless I”m missing something. So, adding funds to the 72(t) IRA is ok but any distribution must follow the original plan.Thanks also for clarifying what constitutes the IRA account, e.g fund not custodian.Jack DeAngelis2008-07-06 09:26, By: JD_Bugs, IP: [18.104.22.168]
L2: What”s my SEPP account?JD-I don”t think you have it yet. What Alan suggested was sell Mutual FundX in IRA 1 (the SEPP IRA) to produce cash for your IRA 1 SEPP distribution, then go to IRA 2 (non-Sepp) and buy the same MF X that you just sold (in the otherIRA) so you still have the same total cash and total investement in MF X when you view the positions in both IRAS… BUT don”t intermingle the two IRA”s AT ALL. You cannot add to or take away from the SEPP IRA except for the periodic withdrawals that you must do. KEN2008-07-06 09:32, By: Ken, IP: [22.214.171.124]
L2: What”s my SEPP account?Got it. Thanks for the clarification. The “new” bottom line: don”t add or take away any funds from a 72(t) IRA except the SEPP distributions.Much thanks to both of you.JD2008-07-06 11:21, By: JD_Bugs, IP: [126.96.36.199]
L2: What”s my SEPP account?You may have a problem if you deposited the rollover funds into the same IRA. Did you sign another IRA agreement or just open another fund account within the plan?2008-07-08 15:14, By: jevd, IP: [188.8.131.52]
L2: What”s my SEPP account?I signed an Account Application to transfer the funds from Scudder to American Century. How can one tell if the accounts are considered separate? They have different account numbers.ThanksJD2008-07-08 19:33, By: JD_Bugs, IP: [184.108.40.206]
L2: What”s my SEPP account?Each account number constitutes a separateIRA account. You may have different mutual funds under one account number. Look for a short series of numbers or letters or both which is unique to a particular fund, followed by a hyphen, then a longer number which is your account number and will be the same for all funds in this account.
You have two separate IRA accounts since you said they have different account numbers. Watch things very closely so theydon”tget mixed. Here”s a key that something may go wrong. When you call the fund company and they search your accounts by using your SSAN, it will pull up both accounts. Now the human factor enters. Make sure they pick the correct account to work with. My suggestion is to always use the account number and not SSAN when talking with the reps.Hope this helps.Jim2008-07-09 07:58, By: Jim, IP: [220.127.116.11]