Roth and 72T

Submitted by Scott Lojewski on Tue, 2017-11-07 18:44

I am 52 and retired in June 2017 and I just finished maxing my Roth IRA for the year, I will be taking the RMD from my 72T program in 2018 I cannot contribute to my Roth next year can I.



Submitted by Alan - IRA critic on Tue, 2017-11-07 19:48

  • You shouldn’t use the RMD method for your 72t plan. You should use the fixed amortization method which results in only one calculation when the plan begins and your annual distribution will not change. But you would still be allowed a one time switch to the RMD method later on if you wanted to reduce your distribution amount. The amortization method will also generate a much larger 72t distribution per dollar of account balance as well.
  • Are you planning to include your Roth IRA as part of your 72t plan?  This can be done but is rare and the IRS sees very few such plans. If you are asking about making new Roth contributions in the future, you must have earned income or your spouse must have earned income, and if so you can make a new Roth contribution to any Roth IRA that is NOT part of your 72t plan. In other words, if you used your Roth balance to compute the amount of your 72t distribution, you cannot make any new contributions to that particular Roth IRA, but could do a newly opened Roth IRA.

Submitted by Scott Lojewski on Wed, 2017-11-08 19:43

 I have already started my 72T and did not plan it out as I should have as I am taking too much thus the reason for switching to the one time RMD in January of 2018 and no I am not using my roth to fund my 72T in any way.I understand that I will not be able to contribute to my Rothe next year unless it is from earned income, not 72t distributions, Thank you very much for the information.   

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