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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 124795  
Subject: Re: Equal Tax-Qualified Plan Annual Distribution Date: 11/17/1999 1:58 PM
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SJLeftHand asks,

Although there usually are early-distribution Federal tax penalties for making tax-qualified plan distributions before age 59 1/2, I believe that there is a provision in the Federal tax law by which a taxpayer can avoid the penalties (but, of course, not the income taxes) by making substantially equal annual distributions for at least 5 years or through age 59 1/2, whichever is longer. If this scenario is correct, how can I determine what is the maximum allowable distribution assuming my current total assets under such tax-qualified plans is approximately $210K (with 15% annualized appreciation), and I currently am age 43? I believe that my life expectancy, which I do not know, is a quantity which I must consider in my calculations.

There is a free calculator on the Retire Early Home Page that shows you how to determine the amount of a "substantially equal periodic payment" (SEPP) using the 3 permissible methods. See link:


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