72t Methods and Life Expectancy Tables
Client is 55 years old. Non-spouse domestic partner is same age Moving to new state. 72t to be put into place. I’d like to separate the 72t IRA from remainder of IRA holdings so there is a separate bucket of cash available in the case of unforeseen additional needs and the 72t IRA doesn’t blow up with penalties back to Year 1. Questions : 1) Can we choose either method ? A) RMD B) Fixed amortization c) Fixed annuitization. 2) Can we select our choice of Life expectancy Tables ? a) Uniform Lifetime b) Single Life Expectancy c ) Joint Life Expectancy Thank you
Permalink Submitted by Alan - IRA critic on Thu, 2022-04-07 21:51
Any of the 3 methods can be chosen, but the most beneficial combination is the fixed amortization method using the single life table. This combination produces the largest calculated distribution per dollar of initial IRA balance, and therefore also the largest IRA balance remaining for the non 72 IRA balance. The option to make the one time switch to the RMD method also remains intact.
Permalink Submitted by Patrick Lanza on Thu, 2022-04-07 22:26
Thank you Alan