Elective Deferrals while 72t is ongoing
Do any provisions limit or preclude elective deferrals to a completely unrelated plan (such as a 403(b)) while a 72t is underway?
Do any provisions limit or preclude elective deferrals to a completely unrelated plan (such as a 403(b)) while a 72t is underway?
Permalink Submitted by Alan Spross on Mon, 2010-08-23 23:10
No. There are no restictions on what you can do with any retirement accounts that are NOT part of the 72t plan, ie those accounts or transfers therefrom that were not part of the original account balance on which the 72t calculations were based.
In fact elective deferrals are a good way to replenish the retirement assets that are being drawn down until the 72t plan terminates, and also to reduce current tax liability. In cases where employment is re established after starting a 72t plan, the one time switch to the MD method will also reduce the plan distributions.