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[Biker boy]

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

 

[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.

 

[Biker boy]

Thanks

Thanks for the reply!
I can't believe I sent my first post to the administrator forum.

 

[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?


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[tmm99]

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?


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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!

 

[marko]

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.

 

[frayne]

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.

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.

 

[Rothman]

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.


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[tmm99]

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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[pb4uski]

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....

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.

 

[sengsational]

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.