72t on the Net

10% penalty

I've done some research on the tax preparer side and would like to share the following information and links (which I'm supposed to be able to post). Unless you can get some favoable information from OMB on this subject, it looks like Federal employees, eventhough they may perform similar jobs as the Non-Federal sector, you don't get a break for le - continued...

10% penalty

The TSP is not a defined benefit plan, and the exception in Sec 72(t)(10) is limited to defined benefit plans. In addition, you are not considered a PSO as you are not a state employee, and the job description also appears not to qualify under 72(t)(10) even if you were a state or state agency employee. - continued...

10% penalty

As I understand it, the exemption is for "state" not "federal" PSOs. See question #6 in the IRS Bulletin (Site does not allow links, so search for: "Internal Revenue Bulletin: Notice 2007-7 Miscellaneous Pension Protection Act Changes") - continued...

10% penalty

Public safety officials are exempt from the 10% penalty for early distributions after age 50. I think that you would be included in this category, but I would double check with the plan administrator, FAA, etc. - continued...

10% penalty

I am an Air Traffic Controller with the FAA and we have early retirement like LEO and FF. My question is am I exempt from paying the 10% penalty if I withdraw from my TSP at age 50 without doing a SEPP? Thnx, KO - continued...

June AFR

June, 2013... 120% Mid-Term = 1.14%, Applicable Federal Rates for 72(t) and 72(q) distributions. Click HERE - continued...

withdrawal dates

Not necessarily, I've been with Fidelity for 6 years now. My SEPP will be ending this October. I have nothing but good service from my agent at Fidelity. The key is finding the right agent. And I think any brokerage firm has people who are not informed on SEPP's. Bill Strecker in his book says 90% of the people in the financial business have no ide - continued...

withdrawal dates

Thanks guys for your replies based on other posts maybe I should have picked a different brokerage firm. - continued...

withdrawal dates

Nope, I'm not that good. it was in his previous post. - continued...

withdrawal dates

Scott must be psychic I do not see where the poster indicated his date of birth. Fidelity has a great marketing department with so many people asking questions here about SEPP 72-T with Fidelity. It would be better if they spent more of this money training their representatives based upon all of the misinformation that posters indicate that they a - continued...

withdrawal dates

The SEPP is between you and the IRS, and please keep this in mind. The individual from Fidelity is giving poor advice. Your plan will run in excess of 5 years, because you turn 59.5 on 10/whatever/2018. This means you can take 7 months, or an entire annual distribution this year, and it can be taken lump sum should you choose. The 1099R at the end - continued...

withdrawal dates

nessaf... Let's start with whoever you talked to at Fidelity must know little to nothing about SEPP plans - he shouldn't be giving out any information on SEPPs, he is merely giving fidelity a bad name. The 1st of the month may be a limitation of their administrative system, but not a SEPP limitation. You can take withdrawals on any date you want as - continued...

withdrawal dates

Starting sepp beginning June 15 was told by Fidelity if I try to get anything other than the first payment starting in June I will bust the plan. I was wondering should I wait till after my first payment to try to get the payments for the previous months. The representative told me he could send me a check now even before the plan is in effect as a - continued...

Starting plan in April

It seems ok to me : $ 5,997.50 $ 2,998.75 $ 2,998.75 $ 23,990.00 ( 8 @ $ 2,998.75) -------------- $ 35,984.95 ======== 1 @ $ 2,998.75 = $ 35,984.95 I think you might be confused by a posting about someone who wanted to change the METHOD/CALCULATION to REDUCE his annual payment. Jim was just warning that the distributions already taken in 201 - continued...

Starting plan in April

I might have messed up my 72t plan already. In April I took a lump payment of $5997.50 then instructed my custodian to begin automatic monthly payments of $2998.75 in May. In addition to the automatic payments in May and June I planned on taking two manual payments of $2998.75 each (one in May and one in June). All this, with monthly payments fo - continued...

Distribution of money in 72t Question

You stated the key point that you must take ONLY the exact, annual amount each year. How you make the withdrawals is your choice and you may change it whenever you like. I assume that you have taken either 4 or 5 monthly withdrawals so far this year so you may accelerate the ramaining distributions to equal your exact, annual distribution amount. - continued...

Distribution of money in 72t Question

I started a 72t August 11-2011 with a monthly withdrawal. I was wondering if a person can take out multiple months of withdrawals at once after a monthly was set up. I want to purchase a piece of property and this would help greatly if I could do that. I know you have to make sure you only take out the exact amount yearly but dont know if you can - continued...

pro rating sepp

Thanks for your replies info very helpful. - continued...

Increasing Federal tax withholding on a SEEP in progress?

Thank you, DLZ. Jim F - continued...

Increasing Federal tax withholding on a SEEP in progress?

Jim -- GREAT ANSWER & SUGGESTED ALTERNATIVES. - continued...

Increasing Federal tax withholding on a SEEP in progress?

Since you seem to not need all of the funds from your SEPP disribution since you have gone back to work, you might consider the one-time switch to the "Minimum Distribution" method which will lower your total SEPP dstribution requirements. If you choose this option you have some important items to consider. 1. If you are taking monthly distributi - continued...

Increasing Federal tax withholding on a SEEP in progress?

Stu, I changed my fed withholding on a SEPP with no problem. They usually ask for a percent (of gross payout) for FED withholding, or some may allow you to add a flat amount to each current withholding. I would go with the flat if allowed, because you should be able to calculate how much more you need, and then give them that flat amount figure - continued...

pro rating sepp

First, it should be important that you understand what type of SEPP plan you're creating. Assuming a birth date of 4/20/59, and a first distribution of 6/15/13, your plan will run longer than 5 years turning 59.5 on 10/20/18. This means your plan gives you a bit more flexability. You may take 7 monthy payments, of a full annual distribution this ye - continued...

pro rating sepp

One thing to remember - a SEPP, like any IRA, is between you and the IRS. Fidelity doesn't have to agree one way or the other and probably won't give you a code of '2' anyway. Merely claim the SEPP exemption on IRS form 5329. - continued...

pro rating sepp

It doesn't matter. You can take either 100% of the annual distribution in whatever amounts or frequencies you want in 2013, and continuing or changing the frequencies and amounts in any or all future years so long as you take the same annual amount by 12/31 each calendar year, or in the first calendar year (2013) you can take 7/12 of the annual amo - continued...