Oops, on re-reading your post there is something you posted that is wrong. Assuming you aren't talking about an IRA that you inherited, there are NOT 3 timelines as you said. You must continue the 72T for 5 years OR until you reach 59 1/2, which ever takes LONGER. That is it. The 10% penalty you avoided comes due in in the year that you break that deal, which includes taking more or less out per year. It must be exactly the same each year for at least 5 years and you must reach 591/2 in order to avoid the 10% penalty. If you screw it up in year 5 you owe the IRS that 10% for ALL of the years you didn't pay it. Also, you do not have to be within 5 years of 59 1/2 to start the 72T. You can start at any age, but the younger you are the less you can get out each year.
I stayed up all night before last, working out a division on my PM IRA that was close enough to balance out with the cash in the account to make five even withdrawals, and slept most of this yesterday afternoon,
just to listen to the CPA tell me that she had made a mistake. She said, after talking to another CPA who was more familiar with 72Ts, that all three methods given
the life expectancy method - calculated under the minimum distribution rules;
the amortization method - amortize account balance using life expectancies and a reasonable interest rate;
and the annuitization method - account balance divided by an annuity factor using both a reasonable mortality table and interest rate
for
Substantially Equal Periodic Payment Plans (SEPP) under Section 72(q) or 72(t) offer a little over 4.5 % of the total value of the IRA.
Either way, it's not worth the cost of the CPA's labor plus the 10% additional tax, and the risk, if it's not done right,
You may have to pay a 25%, rather than a 10%, additional tax if you receive distributions from a SIMPLE IRA before you are age 59½.
After taking a rough estimate on my taxes, if I withdraw the entire IRA at one time, the tax cost would be about 33% of the value of the IRA, and my IRA is large at all.
My learned lesson to tell others,
DON'T TRUST THE GOVERNMENT!
Be VERY CAUTIOUS before opening an IRA or a 401K.
You're setting yourself up to be ripped off by the government.
Better to pay the taxes NOW, and be responsible for your own retirement.
I don't know what I'm going to do, but I've got to decide in two days, what to do.
If I start my early withdrawal plan, even if a only draw out 20% of the IRA, I'm subject to a 10% penalty tax on the ENTIRE IRA.
In layman's terms:
Someone asked earlier:
"What is holding the market up if those who have IRAs know the government is about to rob them?"
Good question.
I think
your answer is "God sends them a POWERFUL DELUSION".
One other thing.
The CPA told me that it'd be better to wait until AFTER I turned 59 and 1/2.
Then I could draw it ALL out and NOT be subject to a penalty tax of 10% or more
( unless the law CHANGES between now and the time I reach 59.5 years old).
It's like
trusting "the Democrats not to steal".
My dad's friend, a retired Navy man of 26 years, worked for GM building starters for 21 years after coming out of the Navy.
He didn't make much, but if it wasn't for his Navy enlisted retirement check and benefits, he and his family would be out in the cold.
His GM retirement was his GM 401K, all in GM secured bonds.
Obama and the Democrats stoled over $120,000 from his family, and the GM Union, didn't do a damned thing for him.
