Distribution of IRA over life expectancy Question

From: Bill La Mar <blamar@dialnet.net>
Subject: Distribution of IRA over life expectancy Question
Date: Wed, 20 May 1998 13:56:22 -0500

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> 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? Yes  (Same percentage each year)? Can
> be or can be updated with current life expectancy 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?

Possible.

> 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?
>

not necessarily.

> I understand that once such a plan starts, it must continue until age 59
> 1/2 or 5 years, whichever is longer.
>

You can always check the IRS publication.

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Bill La Mar, Springfield, MO.






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