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72t question
Old 09-09-2015, 08:25 AM   #1
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72t question

If I use a 72t on my rollover IRA at Fidelity, will I be able to direct the withdrawals to come only from the cash or fixed income portion of the account or will they want to draw it down equally across all investment options?
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Old 09-09-2015, 08:45 AM   #2
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I can't imagine that you would not be able to direct the withdrawals from specific holdings within the IRA.

I have only seen those types of limitations within employee sponsored (e.g. 401k) plans. If necessary, I believe you could isolate funds in a separate IRA for the 72t. It's a good idea to use fixed income so your opportunity cost is also fixed.
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Old 09-09-2015, 08:47 AM   #3
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If I use a 72t on my rollover IRA at Fidelity, will I be able to direct the withdrawals to come only from the cash or fixed income portion of the account or will they want to draw it down equally across all investment options?
The thing that matters is that you take out the correct amounts and make the IRS aware of that. You will be making the withdrawals so you can take the money from any portion of the account you like.
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Old 09-09-2015, 10:38 AM   #4
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Originally Posted by Gazingus View Post
If I use a 72t on my rollover IRA at Fidelity, will I be able to direct the withdrawals to come only from the cash or fixed income portion of the account or will they want to draw it down equally across all investment options?
You may have this already but I refer to this 72t website. Lots of good stuff. Cheers.

About 72t on the Net
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Old 09-09-2015, 11:38 AM   #5
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You can specify which account within the IRA you choose to draw from. I did a 72T and took from the MM settlement account within the IRA. As other have pointed out, do your homework and make sure you know the rules as the IRS may coming calling. Also if you do the 72T you will get a 1099R with a code 1 and you will have to complete a 5329 form to note the 72T exception.
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Old 09-09-2015, 04:33 PM   #6
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I agree with others!
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Old 09-10-2015, 12:19 AM   #7
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I have been taking 72t withdrawals for 9 years now from my Schwab IRAs. As I make each transfer, all I tell Schwab is code 2 (no penalty) vs code 1 (penalty). It is my responsibility to keep spreadsheets to make sure I take out exactly the right amount each year - very important as a mistake can break the whole series of withdrawals for that IRA.
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