Guest troutman Posted March 29, 2000 Posted March 29, 2000 I'm 39 years old with a $250K IRA of which I'd like to withdraw funds. It's earning a pretty good interest in the stock market. I've calculated my payout using the life expectancy method of 43.5 years, but how does one find out how to use the other 2 methods? Amortization and Annuity? Could you point me in the right direction?
Bruce Steiner Posted March 29, 2000 Posted March 29, 2000 Ask the lawyer who handles your estate planning to give you a copy of my article on this subject in the January 2000 issue of Estate Planning magazine. ------------------ Bruce Steiner, attorney (212) 986-6000 (NY office) (201) 862-1080 (NJ office) also admitted in FL Bruce Steiner, attorney (212) 986-6000 also admitted in NJ and FL
Michael Devault Posted March 29, 2000 Posted March 29, 2000 You can also check with your IRA custodian. They should be able to help you with these calculations. If you are really adventurous, Internal Revenue Notice 89-25 contains information on how the calculations are performed. Just be aware that the amortization and annuitization methods determine a level amount which must be withdrawn each year. Good luck!
John Olsen Posted March 29, 2000 Posted March 29, 2000 Re 59 1/2 distributions Sy Goldberg's "How To Pay Less Tax On Your Retirement Savings" (Lasser paperaback; available at most good book stores) is an excellent place to start. If you're prepared to wade through a lot of VERY complicated rules, check out Chapter VIII in Noel Ice's monster treatise on QP Distributions, available (for FREE!) on his website (www.trustsandestates.net). With regard to asking your IRA Custodian to help, that might work - if you luck into talking to someone who actually knows the rules. Unfortunately, a LOT of advice emanating from IRA Custodians is being dispensed by customer representatives who have VERY little knowledge or training, and who OFTEN confuse their Company Policies with Tax Law. The rules for pre-59 1/2 distributions (IRC 72(t)) are not all that easy, because they're not all that clear. The IRS has yet to define PRECISELY what will and will not work. I'd suggest consulting a pro who REALLY understands this subject. If your income requirements are such that a simple schedule like amortizing the account balance over your lifetime (from Table V) at, say, the Sect. 7520 rate (currently 8%) won't produce what you need, and you don't want to be locked into using a commerical annuity, you may need to apply for a Private Letter Ruling from the IRS, to approve the arrangement you eventually come up with. In any event, be aware that you MUST ADHERE TO THIS SCHEDULE UNTIL YOU REACH AGE 59 1/2, or ALL DISTRIBUTIONS WILL BE "RECAPTURED" FOR APPLICATION OF THE 10% PENALTY TAX. ------------------ John L. Olsen, CLU, ChFC Olsen Financial Group St. Louis, MO 314-909-8818 John L. Olsen, CLU, ChFC Olsen Financial Group St. Louis, MO 314-909-8818
Guest troutman Posted March 30, 2000 Posted March 30, 2000 WOW! Thank you all very much! I appreciate it immensely. I moved my IRA to my stock broker (Merrill Lynch) many years ago, so I guess they would be the custodian, but I don't think they are the best for dealing with my tax situation. So, I guess I will research the articles and books and bring this info to my tax attorney or my estate planner. Thanks again!
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