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SEPP plan
Old 01-23-2020, 12:42 PM   #1
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SEPP plan

I am trying to calculate my potential withdrawals using a (72)t plan and need to know the %120 Federal mid-term rate.
From what I found it looks like itís right at 2%.
Can someone confirm this for me?

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Old 01-23-2020, 01:05 PM   #2
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I'm pretty sure the SEPP rules require you to use the current or prior month's rates relative to when you actually start the SEPP. So keep in mind that it can change. The IRS publishes the rates monthly here:

Somehow they've already published February 2020 rates here:

which shows a rate of 2.1% for 120% of the mid-term rate assuming annual compounding.

Note that you can also pick a lower interest rate if you want; 2.1% is the highest you could go. You can also carve your IRA into two pieces and do an SEPP on only one of them; this is helpful if the calculated withdrawal is too high for your purposes.


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Old 01-23-2020, 01:14 PM   #3
Dryer sheet wannabe
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Thank you!
I donít plan on doing this until next year possibly so Iím sure it will be different, but Iím
glad to confirm that I was looking in the right place.
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Old 01-23-2020, 04:40 PM   #4
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Originally Posted by SecondCor521 View Post
.... You can also carve your IRA into two pieces and do an SEPP on only one of them; this is helpful if the calculated withdrawal is too high for your purposes.

While I get the idea, in the OP's case he might want to do the max amount and just save what isn't needed for expenses so he has accessibility to it. If he carves the IRA the only way he can get penalty free access to the amount carved out is to start another SEPP whereas if he does the max and saves what he doesn't spend in a taxable account he has more financial flexibility IMO.
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Old 01-23-2020, 04:55 PM   #5
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You are correct. I have all of my savings locked up in retirement accounts. The goal is to get as much money out as I can(penalty free) so I can start growing funds in a taxable account that is more accessible.

I plan on rolling my solo401k and simple IRA into my TIRA when I start the SEPP plan, but Iím thinking about leaving some in the 401k so I can pull from it to pay for my daughterís college expenses.
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