72t change in method
I have a client, age 58, who will be 59 1/2 on April 18, 2019. She started taking 72t withdrawals on July 26, 2014 using the fixed annuity method. In 2018, she wanted to reduce her income, so we made the one-time change to the RMD using the Uniform Table (beneficiary is non-spouse sister age 62). I understand that this change would NOT be treated as a modification within the meaning of 72(t)(4). However, I just wanted to confirm this with elite IRA experts. If true, she can stop distributions on the fifth anniversary, July 26, 2019, consistent with the 5 year schedule.
Permalink Submitted by Alan - IRA critic on Fri, 2018-08-10 18:29
She maintains a 5 year plan, and if she distributed a full annual amount in 2014, she will have completed 60 months of distributions at the end of this year including the RMD based distribution for 2018. It is safer for her NOT to taken any distributions in 2019 until after 7/26 when the plan will have ended. Everything appears to be in order at this time. If she only distributed 6 months of distributions in 2014, then she will have to withdraw 6 months worth in 2019 using the RMD method with updated age and account balance components.
Permalink Submitted by Diane Ouellette on Fri, 2018-08-10 22:36
Thanks so much Alan, she did take 6 months of distributions in 2014, so I will recalculate RMD at year end and take the new distribution amount through June, 2019.