I have an IRA I am considering taking SEPP distributions (Yes, I have considered other options). Quick scenario:
- I am 57 1/2, not yet retired
- I know I am locked into this until I am 62 1/2.
- I have $1.5MM in this account
- My plan is to receive $70,000 / yr. in monthly installments of $5833.33 / month
My questions:
- If I request this distribution in NOVEMBER 2023 in monthly installments to start on the 15th of the month, Do I need to take the entire $70,000 for 2023 or do I just get the November 15 and December 15 distributions of $5833 in 2023? (I do not want to receive the entire annual distribution in 2023 for tax reasons). I thought I may have read somewhere that I need to take the full year distribution by year end.
- This IRA is a rollover that I made in August 2023. What do I use as the balance of this IRA to determine distribution amounts? Do I just use the balance on the day I request the distribution?
- When calculating 5 years, is it calculated using 60 months? For instance if I receive first monthly distribution NOV 15, 2023does the requirement last until OCT 15, 2028?
- Will Turbo Tax ask me all the proper questions to properly document that these distributions were compliant with 72(t)? I talked with my bank - they will issue a 1099R but there is not reference that it is a SEPP distribution.
