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<< Anyway, let's say that I have three different classifications of IRA money:

- tax-deferred contributions and earnings
- Roth contributions
- Roth earnings

Now, it is my understanding that Roth contributions can be taken out at any time, tax and penalty free, and these distributions would not have any effect whatsoever on anything else. Is this accurate? If that is so, I can take all that money out first before taking out the other types. >>

You can, but I'm not sure you want to. While this means you don't pay any tax (or penalty), it also means that those assets don't work producing TAX-FREE income any more. It seems to me that the Roth IRA is the LAST thing to tap, not the first.

<< So, with that out of the way, I know have two different classifications to consider. As I understand it, I can take distributions (without penalty) from the tax-deferred account in some sort of "equal payments" plan. No problem there. The problem comes with determining how the Roth earnings fit into this. >>

Not at all. When determining the payments under the SEPP provision you only consider the traditional IRA assets.

TMF ExRO
Phil Marti
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