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Let me say this first. I am truly amazed and in awe of the amount of information that can be obtained from these boards. In the future we will all be geniuses.

Here then is my question. I am going to retire in 2 months and I was looking for a way to calculate a Substantially Equal Periodic Payment (SEPP). There are 3 IRS recommended ways for the calculation: 1) Life Expectancy, 2) Amortization, and 3) Annuity PLan. I am trying to come up with a investment factor used for method 2) or a UP 1984 Mortality Table and interest rate used for method 3), single or double life that will give me certain amount distribution per a year.

Can anybody tell me where I can obtain the investment factors for method 2)?
Can someone tell me how to obtain a current UP 1984 and how to calculate a factor based on a certain interest rate?

These questions have become pertinent to many people who are retiring before 59 1/2 with lump sums.
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IRC §72(t) is always fun. You are going to need a variety of materials, some of which you may already have. They are:

1. IRC §72(t) itself.
2. IRS Publication 590 (contains Tables I & II) needed for the minimum method #1 & amortization method #2. Or alternatively, IRC Reg §1.72-9 Tables V & VI.
3. Notice 89-25, 1989-1 Cumm. Bulletin 662
4. PLR 9705033, 01/31/97
5. Optional will be the UP-1984 Unisex or the 1983 Male/Female Mortality Tables.

{Did some one say this was going to be easy}

If these materials are easily obtainable for you, then you have all you need; however, some of the reading is a bit techncial.

On the other hand, if you would like someone to do the calculations for you and provide and opinion letter to that effect, drop me an e-mail @wstecker@mns.com.


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Dear Howard2B

IRS does provide tables. I don't have my hand on them, but I believe that if you call 1-800-teletax, you may get the information your need,

or

Check out the IRS site on the Web for available Pubs.,

or

You could call 1-800-tax-form and ask for the appropriate Publication.

Annuity payouts can be computed on most computer financial packages, as well as on a financial calculator. I use a TI82 when I'm not near a computer.
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Greetings, Howard2B, and welcome. You asked:

<<Here then is my question. I am going to retire in 2 months and I was looking for a way to calculate a Substantially Equal Periodic Payment (SEPP). There are 3 IRS recommended ways for the calculation: 1) Life Expectancy, 2) Amortization, and 3) Annuity PLan. I am trying to come up with a investment factor used for method 2) or a UP 1984 Mortality Table and interest rate used for method 3), single or double life that will give me certain amount distribution per a year.

Can anybody tell me where I can obtain the investment factors for method 2)?
Can someone tell me how to obtain a current UP 1984 and how to calculate a factor based on a certain interest rate?

These questions have become pertinent to many people who are retiring before 59 1/2 with lump sums.>>


As TheBadger pointed out, the factors for methods 1 and 2 can be found in IRS Publication 590, Individual Retirement Arrangements. That's available for download at www.irs.gov. The mortality tables needed for method 3 are available in any good business library.

BTW… You may want to read some additional background material on this subject I posted on this board at http://boards.fool.com/registered/Message.asp?id=1040013000805003&sort=postdate , http://boards.fool.com/registered/Message.asp?id=1040013000857001&sort=postdate , and http://boards.fool.com/registered/Message.asp?id=1040013000806003&sort=postdate . They will give you some more things to think about relevant this issue.

Regards….Pixy
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The Retire Early Home Page has an article covering 72(t) exceptions, pre age 59 1/2 IRA withdrawals. It also includes a javascript calculator for the Life Expectancy and Amortization methods and an Excel spreadsheet for handling the Annuity method based on the UP-1984 Mortality Table. See the link below:

http://www.geocities.com/WallStreet/8257/wdraw59.html
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