MRD
DOES THE 2009 SUSPENSION OF MRDs APPLY TO EQUAL PERIODIC PAYMENTS FOR YOUNG RETIREES? (5 YEARS OF PAYMENTS OR 59 1/2 WHICHEVER HAPPENS LATER)
DOES THE 2009 SUSPENSION OF MRDs APPLY TO EQUAL PERIODIC PAYMENTS FOR YOUNG RETIREES? (5 YEARS OF PAYMENTS OR 59 1/2 WHICHEVER HAPPENS LATER)
Permalink Submitted by Anonymous (not verified) on Fri, 2009-02-20 21:56
The suspension of RMDs for 2009 is only for REQUIRED distributions under the 400 code sections.
The substantially equal periodic payments under section 72t must still be withdrawn in 2009 to avoid the 10% penalty.
Permalink Submitted by Anonymous (not verified) on Fri, 2009-02-20 22:50
If you want to reduce your 72t distributions and are not already using the RMD method, there is a one time switch to RMD that can be done. It is early enough in the year to do that effective 1/1/2009. The RMD method would result in a huge reduction of your current distribution, and that would likely be the case for the rest of your plan years, and you would have to do a new calculation every January using the prior year end balance. Check to see if you living expenses can be covered by what would be a permanent reduction until the plan ends. The plan ending date does not change.