72T Withdrawals
Hello,
Is the annual withdrawal requirement a calendar requirement or 12 months from when the owner starts taking withdrawals? I saw one example that alluded to calendar that seemed to make sense from a 1099R perspective but I can’t see any details in the IRS Pubs. Thanks for your help in advance.
Permalink Submitted by Alan - IRA critic on Tue, 2021-08-17 16:41
72t plans are calendar year plans. The first year of a plan started mid year is called a stub year. If the plan will extend longer than 5 years, the first year distribution can be a full annual, or pro rated by the month. For example, if the first distribution is in Sept, an option is to take 4/12 of the annual amount. If the plan is a 5 year plan (first distribution taken after age 54.5), then it is safer to withdraw the full annual amount in the first calendar year and the following 4 calendar years only.