Annuity IRA payout, Under 59.5
This has likely been asked before, but I’m not able to locate it in the forum…
I have an Annuity IRA, just turned 58 (will be 59 1/2 in April 2024). Am I able to elect a 5 year period certain payout on a monthly basis and avoid the 10% early withdrawal penalty since I will receive 5 years of payments, extending beyond age 59.5?
Permalink Submitted by Alan - IRA critic on Wed, 2022-10-26 18:56
No. Because this is an IRA annuity, the only way to avoid the pre 59.5 10% penalty would be to adopt a 5 year 72t plan. Under such a plan the distributions are limited to one of the 3 approved methods described in Notice 2022-6, but the highest payout (fixed amortization method), will produce a far lower annual distribution than a 5 year annuity because it is based on the much longer life expectancy. You might qualify for some other penalty waiver such as high medical expenses, disability, higher education expenses, etc but most people do not qualify for these exceptions.