We frequently get questions regarding the numbers generated by our 72(t)
calculator. Most of the questions center on why our results don’t match the
results they see in someone else’s calculator. The first point that I would
like to make is that we don’t check the results of our competitor’s calculators
and compare them to ours. We are only concerned with the calculations that are
published by the IRS and determining how close our results are to their
published results. While there will always be a little variance due to
rounding, the numbers should still be close.
After the release of Revenue Ruling 2002-62, the IRS published “FAQs regarding
Revenue Ruling 2002-62”. The page (as of 07/1/2005) can be found at
http://www.irs.gov/retirement/article/0,,id=103045,00.html#14
In their FAQ, they published sample calculations based on the following
assumptions: Male, Age 50, 4.5% Interest, Single Life Expectancy and an IRA
balance of $400,000. The results of their calculations are reproduced in the
table below under the column IRS Sample. The results from our
calculators are reproduced in the yyyZ Tools column. You can
use the last column to reproduce the values of another calculator that you are
reviewing.
Our amortization result is off by 49 cents which, based on the IRS Result,
represents a variance of 0.00180583% - probably close enough, even for
Government work.
| 72(t) Method |
IRS Sample |
yyyZ Tools |
??? |
| Minimum Distribution |
$11,695.91 |
$11,695.91 |
|
| Amortization |
$23,134.27 |
$23,134.76 |
|
| Annuity |
$22,906.88 |
$22,906.88 |
|