72t One-time change to RMD method
Say you are age 56 and elect the fixed amortization method of calculating SEPPs under 72t for years 1 and 2, and then switch to the minimum distribution method in year 3 under the one-time allowable election until the end of the 72t period at age 60– ie, the later of attaining age 59 1/2 or the expiration of 5 years. Can you stop taking any distributions after the 72t period is over, or, alternatively, take whatever discretionary amount you wish each year (until age 70 1/2)? Or do you have to continue receiving minimum distributions for the remainder of your life?
Permalink Submitted by Alan Spross on Wed, 2010-07-14 22:54
You can stop distributions. Once you reach the modification date for the plan, you are free to distribute as little (or nothing) or as much as you wish, at least until RMDs begin.
The modification date is the longer of 5 years or age 59.5. The one time switch does not change the modification date for the plan. The modification date is eliminated and a plan is ended early only by 4 events, ie death, disability, busting the plan, or complete exhaustion of funds from the account.