dory36
Early-Retirement.org Founder, Developer of FIRECal
- Joined
- Jun 23, 2002
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See full article at
http://www.foxnews.com/printer_friendly_story/0,3566,64853,00.html
Dory36
http://www.foxnews.com/printer_friendly_story/0,3566,64853,00.html
Good news for those who didn't follow TheBadger's advice to go with the variable withdrawals!A Major Change in IRA Withdrawal Rules
Friday, October 04, 2002
... Once you start "substantially equal periodic" withdrawals, you cannot stop or alter the way you figure them until either: 1) you reach age 59 1/2, or 2) you've taken withdrawals for 5 years -- whichever takes LONGER. If you violate these terms, then the 10% penalty will be applied retroactively to every dollar you've taken out of your IRA since you started.
...
But thanks to this new ruling, individuals in this situation can slow down their IRA withdrawals to help preserve what's left in their accounts. The IRS will now allow them to change from one of the fixed withdrawal methods to the variable one and THIS WILL NOT TRIGGER THE 10% PENALTY!
If this applies to you, instead of having to take out the same amount year after year, you can now re-calculate your annual withdrawal based on what your IRA was worth at the end of the previous year. If your IRA is worth less than the year before, you will take out less; if it goes up in value, so will your withdrawal. Furthermore, YOU CAN MAKE THE SWITCH NOW AND REDUCE YOUR 2002 WITHDRAWAL.
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Dory36