72(t) Increase after age 59 1/2
A client started a 72(t) at age 57. Now that he is age 60 he wants to take a onetime distribution from his 403(b), in addition to his 72(t) amount. I believe this is not allowed without triggering the 10% penalty. But it seems like the IRS would allow additional amounts go be distributed as this would result in additional tax liability. Any chance this is allowed?
Thanks!
Steve
Permalink Submitted by Alan Spross on Thu, 2008-03-20 22:44
Steve,
Are the 72t distributions from the 403b or a different source?
Permalink Submitted by [email protected] on Thu, 2008-03-20 22:58
They are from the 403(b).
Thanks,
Steve
Permalink Submitted by Alan Spross on Thu, 2008-03-20 23:32
SInce the 403b is funding the 72t plan, you are correct. The client must complete the 5 year period to his modification date before changing his distribution amount according to the original calculations.
At least the retroactive penatly and interest on the penalty would only apply to actual amounts taken out prior to age 59.5. Distributions taken after that date will not be penalized even though they result in a penalty on the earlier distributions.
I assume he separated prior to age 55 so that the age 55 exception was never applicable to this particular 403b.