Bobbcat wrote: The SEPP rule that Badger mentioned is available to anyone, but carries stiffer penalties than the original 10% if you change distributions before the time period is up.Actually, depending on one's perspective; this is either true or false. The IRS has deemed that an individual who starts SEPP's must continue them for the latter of 5 years or until that individual attains age 59.5. Thus, if a 45 year old starts SEPP's he must continue them for approx. 15 years. Let's say that after 10 years he stops. In so doing, he has violated the SEPP rules and would owe the 10% surtax on all 10 years of distributions; PLUS statutory interest compounding for all of those 10 years --- essentially, one would owe exactly what should have been paid periodically had the SEPP program not been adopted to begin with. Thus, the IRS would & has taken the position that no onerious additional penalty has been imposed other than that which is statutorily provided. The real issue is that one should not start SEPP's without very careful planning and every intention of continuing those SEPP's until age 59.5 and/or 5 years; otherwise the statutory interest charges will come up and bite you in the posterior.
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