72t Interest Rate
Rulings state that you can use the rate published for either of the two months prior to the month distributions are to begin. I assume that means you can use the Aug 2007 120% of mid-term rate published by the IRS = 6.13% for a distribution submitted today, that will start early Oct 2007? Does that seem right?
DannyM
Permalink Submitted by Alan Spross on Thu, 2007-09-27 03:17
Yes, that’s correct. Of course you can use a lower rate than the published rate, but that will reduce the distribution. Since the Sept and Oct rates are sharply lower, this is a good time to get the most out of a given IRA balance.
You can also use 6.13 if you happen to get the distribution in Sept, but you should not get it that fast or if you requested an October start date.
For 2007 you can take either the full annual indication OR 25% of the annual if your first payment is received in October.