72 T from IRA
Client just established an IRA in 8-2007. According to my calculations, he can withdrawal 30k per yr until age 59 1/2. In his first year of distributions, is he limited to $12,500 (30k divided by 12 = 2,500 x 5 mos left in 2007) or could he take all $30 out now, and start monthly distributions starting in 2008 for 2,500 per month (and continue that stream of payments until 59 1/2).
Permalink Submitted by Alan Spross on Thu, 2007-08-30 05:02
I think you probably mean that the initial 72t distribution was received in August. Short answer to your question is “Yes, he can withdraw 30,000”.
For the first “stub year” of a 72t plan the client has a choice of withdrawing either his full annual 72t calculation or 5 months worth (annual/12 X 5). Of course his modification date is 59.5 only if he started distributions at age 54.5 or younger.
When he sets up his monthly payments in 2008, he should have the payout date set early in the month. That will allow his to double check his total distributions in early December while there is still time to correct some types of errors while avoiding the last minute Holiday crunch.