Distribution Rules for Last Year of 72t Plan
Hypothetical example: IRA Owner born July 1,1968 takes first 72t distribution on July 8, 2024.
- Is the last distribution in year 2028?
- If a distribution is taken in year 2029 before the plan ending date of 7/8/2029, is the 72t plan busted?
- After 7/8/2029 can the owner take any amount from the IRA?
Permalink Submitted by Alan - IRA critic on Fri, 2025-03-07 17:09
This is a 5 year plan and runs through 7/8/29. It’s best if the 2024 distribution was not pro rated and was a full annual distribution, and the last distribution in 2028. If 2024 was prorated (6 month distribution), then there will have to be 6 months of distributions in 2029, as a minimum of 60 months worth must be distributed.
Any distribution in 2029 that is not an allowed distribution will bust the plan. That leaves 3 choices —take nothing in 2029 until after the plan terminates in July if 6o months have been withdrawn by the end of 2028, take out 6 months worth, or take a full annual. Any other number would bust the plan.