Working while taking 72t
L1: Working while taking 72tI am 54 years old and am considering setting up a 72t distribution beginning next month. Are there any rules regarding the amount of income you can earn from another full-time or part-time job after retiring from one job and beginning the 72t distributions? 2014-07-04 00:58, By: Deaner, IP: [188.8.131.52]
L2: Working while taking 72tNo. But you should consider how it might affect your tax bracket. Try to stay in the 15% tax bracket, unless you’ll need total income that will take you into the 25% tax bracket.
You should consider your 2014 income to date, how much the SEPP 72-T will generate for the balance of 2014, and then in 2015 thru July/Aug 2019, and how much your W-2 wages and/or SE net income might be in 2014-2019.
This will bridge your time until starting IRA or 401-K distributions at 59 1/2.
Remember to consider health insurance until Medicare at 65.
Provide for a separate IRA not used for your SEPP 72-T that you can use in case of an emergency until 59 1/2.
If you have a 401-K/403-B, and will be 55 before 12/31/2014, then you should probably not set up a SEPP 72-T, unless your company does not allow partial distributions, because you can take distributions without the 10% early distribution penalty. You could take distributions whenever you needed them even if you already retired this year, so long as you’ll be 55 by 12/31/2014.
If you won’t be 55 until 2015, then I suggest waiting until January to retire (i.e. “separate from service”).
If your company contributed it’s stock to your 401-K, or you bought it yourself in the plan, then talk to the firm oplan administrator about the cost basis and the special NUA ( Net Unrealized Appreciation) provision in the tax code (or talk to an informed tax practitioner).2014-07-04 01:21, By: dlzallestaxes, IP: [184.108.40.206]
L3: Working while taking 72tThank-you for the response. I have already separated from service and will not be age 55 until 4/13/15.2014-07-04 10:15, By: Deaner, IP: [220.127.116.11]
L4: Working while taking 72tThen I refer you back to the first 5 sentences in my prior response.2014-07-04 16:29, By: dlzallestaxes, IP: [18.104.22.168]