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Author: rensimer Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19221  
Subject: SEPPs Date: 4/22/2000 7:33 PM
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I have an IRA and a 403-b retirement account. If I retire early and want to take "substantially equal periodic payments" (SEPPs), do I use the combined balances of my retirement accounts to calculate the SEPP, or can I just take SEPP from one of the accounts?
My IRA trustee said it didn't know and I'd have to check with the IRS. Any help, Pixy?
Thanx, WTR
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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3639 of 19221
Subject: Re: SEPPs Date: 4/23/2000 8:04 AM
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Greetings, WTR, and welcome. You asked:

<<I have an IRA and a 403-b retirement account. If I retire early and want to take "substantially equal periodic payments" (SEPPs), do I use the combined balances of my retirement accounts to calculate the SEPP, or can I just take SEPP from one of the accounts?
My IRA trustee said it didn't know and I'd have to check with the IRS. Any help, Pixy?>>


No, you do not use the combined amounts. Each IRA and each retirement plan is treated as a separate and stand-alone account for the purposes of SEPP. As an example, you could have three IRAs and three 403b accounts, or six accounts in total. Each account stands on its own. So you could take SEPP from one IRA or all three, and the same from the three 403b accounts.

Regards..Pixy

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Author: TheBadger Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3640 of 19221
Subject: Re: SEPPs Date: 4/23/2000 9:57 AM
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Actually, the best way to think through the problem is to start with the combined balances and apply the three different methods to arrive at a theoretical maximum of annual SEPP withdrawals. Then design a plan that meets your personal needs which, just to paint a complex picture, might include three SEPPs from three different accounts sing three different methods starting at three different dates. Once designed, you move monies around before the commencement of SEPPs to line up in a fashion that meets the design.

TheBadger


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Author: skokie3 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5006 of 19221
Subject: Re: SEPPs Date: 9/6/2000 10:03 AM
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I have heard a different version from my financial advisor a CRP, I think that is the correct designator for certified retirement planner. He thinks this may be allowed by IRS but does not know of any IRS documentation that it may be done, and he is advising me against doing so. I wish to withdraw from IRA-1 (SEPP) starting on 1/1/01 and then begin withdrawing from IRA-2 sometime in the future when it makes sense to do so. FYI-I'm 52.

I'd appreciate an IRS reference on this.

TIA,

DougS

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Author: TheBadger Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5007 of 19221
Subject: Re: SEPPs Date: 9/6/2000 10:12 AM
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The IRS has regularly ruled favorably on the issue of multiple SEPP withdrawal streams from different IRA's. Needless to say, the IRA's used must be kept discrete from each other.

Tell your CRP/CFP to go look at PLR's 97-47039, 97-47045 & 98-12038.

TheBadger


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Author: skokie3 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5008 of 19221
Subject: Re: SEPPs Date: 9/6/2000 10:15 AM
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Greetings, WTR, and welcome. You asked:

<<I have an IRA and a 403-b retirement account. If I retire early and want to take "substantially equal periodic payments" (SEPPs), do I use the combined balances of my retirement accounts to calculate the SEPP, or can I just take SEPP from one of the accounts?
My IRA trustee said it didn't know and I'd have to check with the IRS. Any help, Pixy?>>

*******************Reply By Pixy***************
No, you do not use the combined amounts. Each IRA and each retirement plan is treated as a separate and stand-alone account for the purposes of SEPP. As an example, you could have three IRAs and three 403b accounts, or six accounts in total. Each account stands on its own. So you could take SEPP from one IRA or all three, and the same from the three 403b accounts.

Regards..Pixy
******************************************************
I posted an earlier reply today but did not include the earlier discussions. Sorry, it was my first post ot this board.

I have heard a different version from my financial advisor a CRP, I think that is the correct designator for certified retirement planner. He thinks this may be allowed by IRS but does not know of any IRS documentation that it may be done, and he is advising me against doing so. I have 2 IRAs. I wish to withdraw from IRA-1 (SEPP) starting on 1/1/01 and then begin withdrawing from IRA-2 also SEPP sometime in the future when it makes sense to do so. FYI-I'm 52.

I'd appreciate an IRS reference on this.

TIA,

DougS






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Author: TheBadger Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5009 of 19221
Subject: Re: SEPPs Date: 9/6/2000 10:39 AM
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No, you do not use the combined amounts. Each IRA and each retirement plan is treated as a separate and stand-alone account for the purposes of SEPP. As an example, you could have three IRAs and three 403b accounts, or six accounts in total. Each account stands on its own. So you could take SEPP from one IRA or all three, and the same from the three 403b accounts. Regards..Pixy

Just so no one mis-interprets Pixy's response; a taxpayer can have any number of accounts; let's say 10. You may commence SEPP's on: just one of those accounts; some subset of the accounts; e.g. 2,3,4&8; or commence SEPP's on all of the accounts. The later two cases, you are creating a "SEPP universe" which can not be comingled with the unused accounts & needless-to-say; in example #2; the actual withdrawal would need to come from accounts 2,3,4&8 & may not come from accounts 1,5,6,7,9&10.

TheBadger



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Author: phooley Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5010 of 19221
Subject: Re: SEPPs Date: 9/6/2000 11:43 AM
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you are creating a "SEPP universe" which can not be comingled with the unused accounts

I would like to piggy-back on this thread if I may.

Let's say you have 4 traditional, fully-deductible IRAs. Two are with company A, one with company F, and one with company P. You are 55 years and 11 months old (so if you start a SEPP now, it will have to run until you are about 61).

Just for planning purposes, assume it's around November 1, 1998.

Can you use the balances of the two IRAs from Company A to determine the amount of your SEPP withdrawals -- freeze contributions to those two IRAs -- start the withdrawals from IRA #A-1 -- and later (during the first 5 years) switch to withdrawing from IRA #A-2 instead of #A-1 -- OR ask company A to transfer some funds from IRA #A-2 to IRA #A-1?

Phooley
(ummm... still doing retrospective "planning")

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Author: TheBadger Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5011 of 19221
Subject: Re: SEPPs Date: 9/6/2000 11:52 AM
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Phooley:

Absolutely correct.

TheBadger


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Author: phooley Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5012 of 19221
Subject: Re: SEPPs Date: 9/6/2000 11:54 AM
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TheBadger,

Thanks!

Phooley
("planning" to start planning for 2001, 2002 and beyond, thanks to TMF!)

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