Permalink Submitted by Alan - IRA critic on Wed, 2014-11-19 16:22
It depends on whether the plan is a 5 year plan or one that ends at 59.5. Distributions do not have to be taken on the same day or same month from year to year. For a 5 year plan, there must be a total of 60 months (5 years) worth of distributions taken, but if the first year is pro rated, the last payment will be in the 6th calendar year. It is vital not to take a non SEPP distribution before the 5 year plan modification date, which is 5 years and one day after the date of the first distribution. I can be more specific if you can provide the month and year of client’s DOB and whether the first year distribution was pro rated or a full annual.
Permalink Submitted by Alan - IRA critic on Wed, 2014-11-19 17:29
This is a 5 year plan which just ended 11/16/2014. The last monthly distribution would have been 10/15/2014 which brings the total to 60 months. Therefore, the answer to your post is Yes, 10/15 was the final plan distribution. As of today, client can take out either nothing or as much as she wants since the plan is over. But to avoid a 1099R that includes additional distributions and possible IRS confusion, it would be better to wait until 2015 before taking out additional amounts.
Permalink Submitted by Alan - IRA critic on Wed, 2014-11-19 16:22
It depends on whether the plan is a 5 year plan or one that ends at 59.5. Distributions do not have to be taken on the same day or same month from year to year. For a 5 year plan, there must be a total of 60 months (5 years) worth of distributions taken, but if the first year is pro rated, the last payment will be in the 6th calendar year. It is vital not to take a non SEPP distribution before the 5 year plan modification date, which is 5 years and one day after the date of the first distribution. I can be more specific if you can provide the month and year of client’s DOB and whether the first year distribution was pro rated or a full annual.
Permalink Submitted by Wendy Mommaerts on Wed, 2014-11-19 16:54
Client’s birth date is 4/18/1954, was making monthly withdrawals beginning 11/15/2009
Permalink Submitted by Alan - IRA critic on Wed, 2014-11-19 17:29
This is a 5 year plan which just ended 11/16/2014. The last monthly distribution would have been 10/15/2014 which brings the total to 60 months. Therefore, the answer to your post is Yes, 10/15 was the final plan distribution. As of today, client can take out either nothing or as much as she wants since the plan is over. But to avoid a 1099R that includes additional distributions and possible IRS confusion, it would be better to wait until 2015 before taking out additional amounts.