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I reached age 70 in December. First question..is it true that I do not have to withdraw income from deferred plans until age 70 1/2 and that I can wait until at least January 2001.
Next question..where do I find the tables that indicate the amount of withdrawals I must take.
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I reached age 70 in December. First question..is it true that I do not have to withdraw income from deferred plans until age 70 1/2 and that I can wait until at least January 2001.

You turn age 70 1/2 in 2000. Your first distribution is due by April 1, 2001 based on your plan balance 12/31/99.

Your second distribution is due December 31, 2001 based on your plan balance 12/31/00 (less your first distribution if it is paid in 2001).

You may want to make your first distribution in 2000 in order to manage your marginal tax bracket against making two distributions in 2001.

Next question..where do I find the tables that indicate the amount of withdrawals I must take.

Should be in IRS pub 590. Since your birthday age is 71 in 2000, use age 71 for your first distribution.

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You must take distributions out of each plan.
You may combine IRAs for the calculation and take the distribution out of any single IRAs.
Other than the above IRAs and plans work the same at this point.
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If the plan is of sizable size and part of your estate planning, be aware of how the minimum distribution choices effect
-distributions during life
-distributions after death to beneficiaries
I understand that the TMFTaxes has an article/FAQ section on Stretch IRAs. Find it and read it. Hopefully, someone will post the link.

If you want to use the Stretch rules, make sure your plan administrator will do it. Otherwise you will need to transfer the dollars to an IRA. Then make sure the custodian you pick will do it.

*Cat
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http://www.dtonline.com/pfa/payout.htm discusses "IRA Payout and Beneficiary Issues" as presented by Deloitte & Touche.

You might like to go the the official IRS regulations before you take any action. http://www.irs.ustreas.gov/forms_pubs/pubs/p590toc.htm is an online copy of "Publication 590. Individual Retirement Arrangements (IRAs), (Including Roth IRAs and Education IRAs)". Its Appendix E has two life expectancy tables. The single life expectancy table, Table I, is at http://www.irs.ustreas.gov/forms_pubs/graphics/15160x17.gif

Notice that the life expectancy table applies to people of either sex. Men in the USA have a life expectancy nearly seven years shorter than women. It seems remarkable that the government allows men the benefit of women's longer life expectancy in computing minimum IRA withdrawals.

Chips
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Tennisguy1 writes (in part):

I reached age 70 in December. First question..is it true that I do not have to withdraw income from deferred plans until age 70 1/2 and that I can wait until at least January 2001.

I reply:

As I understand the rules, you must make your first withdrawal by April 1 of the year after the year in which you turn 70 1/2, so in your case, you may wait until April 1, 2001, to make your first mandatory withdrawal. However, this may be a bad idea, because you will have to make your second withdrawal by December 31, 2001. One exception -- if you are still working, I believe that you are not required to take mandatory withdrawals from a 401(k) plan through your current employer. I may be wrong about this, though. --Bob
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Thank you for the very clear and explicit reply to my inquiry..I certainly will follow through...
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In other words the distribution is $ divided by the number of years left to live if over 70 1/2 years of age. A simple yet potentialy expensive formula.

Thank you
Gelfson
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