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06-27-2015, 11:46 AM
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#1
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Confused about dryer sheets
Join Date: Jun 2015
Location: North royalton
Posts: 2
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New to the forum
Greetings from the seat of my Harley! I'd be out riding today but the rain is really coming down. I've been retired since 2010, utilized the 72t rules to maintain a decent lifestyle.
I have a question.
This September my 5yr/59-1/2 age requirements Are complete and I can give myself a raise.
How does one notify the IRS that the waiting period has been satisfied?
Is there a form to fill out or some type of notification that must happen?
Or do I just go ahead and withdraw the additional amount and explain myself on my Form 1040.
I look forward to any assistance on this
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06-27-2015, 08:52 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,373
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When the 401k or IRA administrator reports the withdrawal to the IRS, the code they use will indicate that there is no penalty associated with that withdrawal. They'll know because they know the date of the withdrawal and your birthdate and can do math.
Check with them, but I'm pretty sure that is what will happen.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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06-27-2015, 09:03 PM
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#3
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Confused about dryer sheets
Join Date: Jun 2015
Location: North royalton
Posts: 2
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Thanks
Thanks for the reply!
I can't believe I sent my first post to the administrator forum.
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06-28-2015, 07:17 AM
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#4
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Recycles dryer sheets
Join Date: Apr 2013
Posts: 252
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New to the forum
Welcome biker boy and congrats on retirement. I was wondering if you considered starting a new 72t if you desired a bigger withdraw? As I understand the strategy that I intend to use one day is as long as you separate the IRA for the 72t then if you find you need more money or market growth makes more money possible which is probably the case for you over the last 5 years, you separate another IRA bucket and start another 72t. Of course each requires 5 years or 59 1/2 age whichever is longer.
Anyway did you consider doing so?
Sent from my iPad using Early Retirement Forum
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06-28-2015, 08:44 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2008
Posts: 5,214
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Quote:
Originally Posted by Rothman
Welcome biker boy and congrats on retirement. I was wondering if you considered starting a new 72t if you desired a bigger withdraw? As I understand the strategy that I intend to use one day is as long as you separate the IRA for the 72t then if you find you need more money or market growth makes more money possible which is probably the case for you over the last 5 years, you separate another IRA bucket and start another 72t. Of course each requires 5 years or 59 1/2 age whichever is longer.
Anyway did you consider doing so?
Sent from my iPad using Early Retirement Forum
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What would the difference be between getting another 72t and getting a fixed annuity? (I am a finance novice; thus the question...) Thanks!
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06-28-2015, 09:04 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2011
Posts: 8,419
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Usually the administrator of the IRA/401K, whether it be Fido, Vanguard, TRP or whoever, knows your birthday.
If you try to W/D before your 59 1/2 date, their software will strongly ask you if you really want to do this. After your 59 1/2 date, it just let's you go with it.
__________________
Living well is the best revenge!
Retired @ 52 in 2005
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06-28-2015, 09:29 AM
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#7
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Thinks s/he gets paid by the post
Join Date: Oct 2002
Location: Chattanooga
Posts: 3,893
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Quote:
Originally Posted by pb4uski
When the 401k or IRA administrator reports the withdrawal to the IRS, the code they use will indicate that there is no penalty associated with that withdrawal. They'll know because they know the date of the withdrawal and your birthdate and can do math.
Check with them, but I'm pretty sure that is what will happen.
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Exactly right. I did the 72T but started when I was 56 so I had to go for five years before I could change the amount I withdrew from my IRA. Just make darn sure you have met the 59.5 or five years whichever is longer requirement. To be safe I went an extra year and had the 1099R with the code indicating no early withdrawal penalty in my hand before I changed anything.
Oh and welcome biker boy. Scooter driver here as well. Ride safe and keep the shiny side up.
__________________
Earning money is an action, saving money is a behavior, growing money takes a well diversified portfolio and the discipline to ignore market swings.
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06-28-2015, 05:47 PM
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#8
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Recycles dryer sheets
Join Date: Apr 2013
Posts: 252
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tmm99 I was referring to doing a second 72t prior to 59 1/2 without penalty. I'm not familiar with annuities thru the IRA and don't believe they qualified for early withdraw, but I may be wrong.
Sent from my iPad using Early Retirement Forum
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06-28-2015, 09:20 PM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2008
Posts: 5,214
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That's OK, rothman. Thanks though. I was just wondering what the difference was between the 72t and fixed annuities is all (it said the OP is now over 59.5.)
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06-29-2015, 07:40 AM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,373
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Quote:
Originally Posted by frayne
Exactly right. I did the 72T but started when I was 56 so I had to go for five years before I could change the amount I withdrew from my IRA. Just make darn sure you have met the 59.5 or five years whichever is longer requirement. To be safe I went an extra year and had the 1099R with the code indicating no early withdrawal penalty in my hand before I changed anything....
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What I wonder is if you do a withdrawal before you are 59 1/2 and another one after you are 59 1/2 but in the same calendar year, are their systems smart enough to know the difference and have different early withdrawal penalty codes for each withdrawal. I presume so... or perhaps you get two 1099Rs, each with a different code.
I don't really care since I'm past 59 1/2, but I am curious.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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06-29-2015, 09:45 AM
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#11
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Moderator
Join Date: Oct 2010
Posts: 10,725
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It would be nice to have an option on the web site: before the transaction was completed "Show IRS Form", where a pro-forma 1099R form is displayed (with all tha caveats, of course) that shows how they will fill-out the form, should the transaction be processed. You could pause, plug that into your tax software, and see if its working out as you expected.
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