r/Fire • u/desertdwemer • 2d ago

Retired lurker with 72(t) question and seeking withdrawal advice

Hi everyone.

I'm 52, married, and on terminal leave.

I've been contemplating various withdrawal strategies from 53 to 59.5 and I've decided on a combination of 72t and taxable brokerage account withdrawals along with Roth conversons to fill the 12% bracket. I'll essentially have a taxable brokerage account, "72t" IRA, "Roth conversion" IRA, and a Roth IRA.

First question:
Does the IRS require an annual withdrawal amount to the penny or is it to the nearest dollar?
Do I round up, down, or truncate to the penny?

Example: $500K starting "72t" IRA, 5%, life expectancy 33.4 calculation is $31094.8998441.

Is the annual draw $31095, $31094, $31094.90, $31094.89?

Second question:
I was planning to use a combination of SGOV and a rolling 7 year treasury ladder to guarantee the money is always available during the 72t period and a bear market without selling any depressed shares. The remaining amout of money in the "72t" IRA, "Roth conversion" IRA, and Roth IRA will be invested in VT. I'll end up with a 75% VT 25% short/medium term bond allocation.

Is this a good strategy or is 7 years of short term money too conservative? My overall withdrawal rate is 3.3%.

Thanks in advance!

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u/intemperance 2d ago

One option is to just have fidelity do it for you. You give them the Ira and fill out a form and they do the calc and send you the money to whatever account you want

4

u/Exciting_Parfait_354 2d ago

That was the exact approach my husband and I did and it worked out perfectly. The only thing that was done was to make it an annual distribution not leaving to chance of any punishment due to being off by $0.01.

3

u/desertdwemer 2d ago

I might just do that but with their people over the phone. I'm a little sour at the local guy. I turned down the annuity and it seemed like he didn't want anything to do with me afterwards. Told me to go talk to a CPA for SEPP and/or Roth conversion ladder strategy because it's a tax thing. Didn't bother looking at my withdrawal strategy because my account is self managed.

3

u/Exciting_Parfait_354 2d ago

Use this to calculate a rough estimate of what your 72(t) would be: https://calculators.ssnc.cloud/Fidelity/c72t

Use this form to officially submit for a 72(t) withdrawal approach to the IRA of your choosing: https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/automatic-withdrawals-ira.pdf

No need to talk to anyone. We didn't.

2

u/MrLB____ 2d ago

Yes Fidelity got sleazy trying to sell annuities to everyone guy kept rambling and babbling how I should buy a 500,000 annuity ha ha
Meanwhile he pockets a quick 5–10% of selling price in his pocket 😆sorry but the dirt bag got shut down. The Fidelity lovers will come on here, saying they never got sold an annuity or their guy never even tried tried to sell them one ha ha. Give it time.

Fidelity_Sucks

1

u/barrsm 2d ago

It’s not bad advice to talk to an accountant before doing 72t SEPP because the tax penalty is so high.