Go to Jeff Salisbury LWGate Home Page.From: T Koyn <koyn@users.anet-stl.com>
Subject: Distribution of IRA over life expectancy Question
Date: Sun, 17 May 1998 16:33:26 -0500 (CDT)
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I understand that one may distribute an IRA in "substantially equal payments" over their life expectancy. I have a few questions on how this works. How does one calculate the payment amount, considering that the account will continue to earn returns during distributions? Can it be based on % of assets in account? (Same percentage each year)? Can payment be varied due to recalculation of balance and life expectancy each year or some periodic recalculation schedule, e.g. recalculating the payment each year based on how much is in the account divided by remaining life expectancy? How much flexibility is there to design a method that does not deplete the account, and provides payments that tend to increase with inflation? Can one just take a fixed, non changing percent of the balance each year with the dollar amount changing based on returns and market conditions? Or must payment be the same number of dallars each year without regard to investment returns, inflation, and life expectancy changes, based only on initial balance and life expectancy calculation? I understand that once such a plan starts, it must continue until age 59 1/2 or 5 years, whichever is longer. If you know the answers to any or all of these questions, I would appreciate it greatly if you could share your knowledge with the group and send me an email copy. Thanks in advance for any help you provide. koyn@anet-stl.com - -
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