With all of the conversation going on with regard to Roth IRA Conversions, I thought it would be useful to address a special set of circumstances with regard to Conversions. As the title implies – we’re talking about the eligibility of an IRA for conversion if it is also subject to 72t, or a Series [...]
Posts under ‘72t’
More reasons to keep on rolling (to an IRA, that is)
We have discussed in the past that it is usually better to rollover an old 401(k) plan from a former employer to an IRA – more flexibility in investments, (usually) lower costs, more control, etc., are among the chief reasons to do so. However, in some cases your old 401(k) plan may have access to [...]
IRA Options for a Surviving Spouse Under Age 59 1/2
As a follow-up to an earlier article on Options For a Spousal Inherited IRA, I wanted to address the specific situation that occurs if you have inherited an IRA from your spouse and you’re under age 59½. There are a couple of choices available to you – which can pose a dilemma. As we have [...]
Things to Consider as You Set Up a SOSEPP
So, you’ve decided that you’d like to begin taking distributions from your IRA funds – and you’re under age 59½, so you need to structure your distributions as a Series of Substantially Equal Periodic Payments (SOSEPP). (For more background information on the SOSEPP, see this article.) It is important to do this right, because once [...]
Sam, You Made The Pants Too Short!
With apologies to the writer and performers of the original “Sam, You Made The Pants Too Long!”… This article is about what happens when your IRA declines substantially in value and you’ve put a 72t Series Of Substantially Equal Periodic Payments plan (SOSEPP) into play – and the decline in value has brought your IRA [...]
The “Default” Default Distribution Period
We’ve talked about all kinds of issues surrounding distribution periods, but there’s at least one more facet of distribution periods that we have not addressed just yet. What happens when there is no designated beneficiary for the IRA account? More specifically, what is the longest distribution period that heirs are allowed to stretch an IRA [...]
Are 72t Payments Also Exempted in 2009?
This is a follow-up to my original post regarding the RMD Holiday for 2009. If you’re taking a Series of Substantially Equal Periodic Payments (SOSEPP), also known as 72t payments, from an IRA or other plan, you are not allowed to “skip” a payment for 2009. The reasoning behind this is that your 72t payments [...]
19 Ways to Withdraw IRA Funds Without Penalty
We’ve covered a lot of ground on how you can get at your IRA funds in this blog, but here is an all-inclusive list of the ways I’ve come up with to withdraw your funds without triggering the 10% penalty. This list is for Traditional IRAs only. It is key to note that, although these [...]
Higher Education Expenses Paid From A Qualified Plan
Another way to pull funds from an IRA or a qualified retirement plan (401(k), 403(b), 457, etc.) without having to pay the 10% penalty is to use those funds for Qualified Higher Education Expenses (QHEE). This comes up quite often, as parents are faced with the issues surrounding the dueling requirements of retirement saving and [...]
Separation From Service On or After Age 55
Did you realize that there is a provision within the Internal Revenue Code that allows you to start taking distributions from your 401(k) plan before you reach age 59½? This little-known section of the code, §72(t)(2)(A)(v), can be a real dandy if you happen to fit the requirements. Note: although we will refer to the [...]
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