Agree.I don't disagree with anything you are saying. I'm saying there is no harm and no cost in separating the IRA you want to SEPP away from the rest of your IRA money...just in case.
A situation where your argument does not apply to....let's say a person starts a SEPP at age 57. They will not finish their SEPP until age 62....during which time they may have a desire to use their other IRA money which they can do without busting the SEPP if the IRAs are separate. The only way to do that would be to have separate IRAs.
This does not apply to this poster (or maybe it does for a few months), but it is something for others to keep in mind.
And there are people out there who have the vast majority of their money in a 401k. If they SEPP the whole 401k (or the whole rollover IRA), an unexpected expense that would bust the SEPP is not unlikely.
I'm not trying to argue and I think your plan could work out well for this one poster. But for others reading about this plan...there are pitfalls that can arise by not having a separate account from which SEPP withdrawals are made.
If I ever do SEPP, I will 'slice-off' a portion of my large TIRA into a separate smaller TIRA, with which I will set up the SEPP to get me to age 59.5.
Statistics: Posted by steadyosmosis — Tue Feb 04, 2025 10:49 pm — Replies 26 — Views 2611