Section 72(t)/(q) Calculator

The Section 72(t)/(q) Calculator is a valuable tool used to illustrate exceptions to the 10% penalty assessed when taking distributions prior to age 59-1/2 from qualified plans under Section 72(t) of the IRS code. The exception requires the plan owner to receive Substantially Equal Periodic Payments over his life expectancy or life expectancy of the beneficiary using one of 3 prescribed methods and life expectancy tables.

In this window you can:

• Enter specific information about the minimum distribution method and life expectancy tables.
• Enter specific information regarding the plan amount, distribution frequency, anticipated rate of return, reasonable rate of return, and distribution start year.
• Make changes to any of the information entered and display results automatically on the screen.
• View and print an illustration.

Entering Specific Information

1. Use the tab key or mouse to move around in the window.
2. Enter the Owner Name.
3. Enter the Owner Sex.
4. Enter the Owner Date of Birth.
5. Enter the Owner State of issue.
6. Enter the qualified plan amount.
7. Enter the assumptions for the anticipated rate of return.
8. Enter the date distributions are anticipated to begin and the distribution frequency.
9. Enter the Distribution Method. The choices are Life Expectancy, Annuitization, or Amortization.
10. Enter the beneficiary's date of birth, if applicable.
11. Enter the Life Expectancy Table desired. The available tables are Single Life or Uniform Lifetime Table for Life Expectancy or Amortization Distribution Method, and Single Life only for Annuitization Distribution Method.
12. If Applicable Federal Maximum Rate is selected as the Reasonable Rate of Return, the calculator automatically calculates the maximum rate based on the distribution start date entered. Alternatively, a specified rate may be selected, which allows you to enter a value between 0 and the Applicable Federal Maximum Rate.

Output Options

To create a presentation for the current year's minimum distribution, check the box next to “72(t)/(q) Distribution Quote for Life Expectancy Method".

To create a presentation comparing all minimum distribution methods, click the QUICK RESULTS button.

To create a presentation for a certain minimum distribution method, check the box next to the Distribution Method. The available methods are: Life Expectancy, Amortization, and Annuitization. Graphs for annual distributions and plan analysis are available with this choice.

Viewing & Printing an Illustration

Click on the ILLUSTRATION button. This will launch a PDF in Adobe. Once the illustration launches, you can choose to print and/or save the illustration.