72(t) SEPP Running Out Of Money
Client age 39 considering a 72(t) SEPP payment of 6% that is only guaranteed for 16.7 years (to age 55). If account balance went to zero at that time (highly unlikely), would this be a bust? I think I remember that being an exception. Al
Permalink Submitted by Alan Spross on Tue, 2007-07-31 22:36
Al,
Any otherwise qualified plan under 72q or 72t that simply runs dry is not considered a busted plan. That was clarified in RR 2002-62. 39 certainly is a very early retirement, and client may need a second SEPP or even a third over a 20 year span.