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< Dear Tax Gurus:
On my path to enlightenment and finacial bliss, I have come to a crossroad. I would like to make
my life easier by retiring in stages. I am under 59 1/2 and have been trying to understand the
exceptions to the 10% additional tax and the annuity distribution method. In figuring out my
minimum distribution, as part of the life expectancy method, I have looked up the division factors
for both single and joint survival. To make some decision regarding which factor and when, I hope
get some answers to these queries:
If I start the life expectancy method at 54 1/2, can I change the method at 59 1/2?
If the life expectancy method is IRS approved for a series of substantially equal periodic payments,
do these payments need to be annual or could they be every 8 months or some other less than one
year periodic payment?>

The way I understand the rules, once you choose a distribution method, you're stuck for five years or age 59 1/2, whichever is you could change your payout option at 59 1/2.

Periodic payments could be monthly, weekly (hypothetically), or other periodic. If you're trying to get a higher payout, you might want to examine the amortization method. I know several folks who have used 8-10% amortization schedule over their life expectancy to increase payments. The caveat here is IRS private letter rulings which govern sec. 72-T.

Those are my thoughts...GDC
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