Pre-59½ Distributions Report

[Kathleen Reynolds]

#4389

When you use the Pre-59½ Distributions, the results of the calculations appear in every report; however, the reports that appear in the rest of the program display results with growth that has been compounded annually. Therefore, results that appear in the Pre-59½ Distributions window may have different balances.

Pre-59½ distributions have to last for 5 years and must be paid until the plan owner reaches age 59½. Usually, this results in distributions being made for a portion of the year that the owner reaches age 59½. For example, if distributions are being taken quarterly, and the plan owner turns age 59½ in February 2010, only the first distribution has to be in 2010. If distributions occur at the end of each quarter, no distributions will have to be made in 2010 (assuming that five years’ worth of distributions have already been taken).

The Pre-59½ Distributions report lists the following information:

• Year This column lists each year that the program calculates a distribution.
• Age This column lists the owner’s age in each year. This column only appears when the Distribution Frequency is Annual.
• Month This column appears when the Distribution Frequency is anything other than Annual. The column displays the month in which each distribution occurs.
• Plan Balance This column lists the total amount of money in the owner’s plan in each year. Depending on the Distribution Frequency, the Plan Balance is calculated differently. For example, if the Distribution Frequency is Annual, the growth is compounded only once each year. If it is Semiannual, compounding occurs twice. If it is Quarterly, compounding occurs four times each year. And if it is monthly, then compounding occurs every month.

Life Expectancy Factor or Annuity Factor

 

If you select the Minimum Distributions method, this column lists the life expectancy factors that the program uses to calculate the annual distribution. To calculate the life expectancy factors, the program uses the ages of the Owner and/or the Beneficiary and the minimum distribution rules.

If you select the Amortization method, the column also lists a life expectancy factor. The program amortizes the plan balance over the number of years that are equal to the Life Expectancy Factor. Amortization takes place using the Reasonable Interest Rate that you enter.

If you select the Annuity Factor method, this column displays the annuity factor from the Annuity Factor Table that you choose.

Distribution Amount

In accordance with the Distribution Method that you choose, this column lists the pre-59 ½ distribution for each year.

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