72t
I am not sure how to handle this. I have received multiple 72t illustrations from companies and none of them are the same? I just saw a calculator that illustrated 5.54% and anothe that was 3.78%. How can I get a realistic number that will pass the IRS rules? My client is 55 with $205,000.
Permalink Submitted by Alan Spross on Mon, 2008-04-14 21:23
See att’d site which specializes in 72t related issues and includes a calculator. You can have your calcs checked by posting details on the discussion board there:
A client with only 205,000 in total IRA balances to tap will probably want to use the highest available interest rate and account balance to calculate the 72t annual distribution. For a plan starting in May, for example, client will probably also want to opt for taking the full 2008 CY distribution rather than pro rating it according to the inception month of the plan.
He would use individual life expectancy rather than joint to get a higher payment, and would probably use the 12/31/07 account balance, which is probably higher than what he has now if there is stock market exposure. But he can only use a 12/31/07 balance if there has been NO contributions or distributions from the IRA after the balance date.
http://72t.net/Default.aspx
Permalink Submitted by Al Fry on Mon, 2008-04-14 21:53
Also the “Reasonable Interest Rate” is not what comes out, it is just used in the calculation.