About the 72(t) SEPP Calculator
This 72(t) calculator estimates the annual and monthly withdrawals you can take from an IRA or old 401(k) before age 59½ without the 10% early-distribution penalty, using a series of substantially equal periodic payments (SEPP). It runs all three IRS-approved methods side by side — required minimum distribution, fixed amortization and fixed annuitization — so you can see the range of payments your balance supports.
It is meant for early retirees and people bridging the years before pensions, Social Security or penalty-free access begin. Enter the account balance, your age in the first distribution year and the interest rate you will use. The rate may be any rate up to the greater of 5% or 120% of the federal mid-term rate for either of the two months before your first payment, so 5% is always allowed.
Calculations follow IRS Notice 2022-6: life expectancies come from the Single Life Table or the Uniform Lifetime Table in that notice, and annuity factors use the mortality rates in Treasury Regulation §1.401(a)(9)-9(e). Payments must continue unchanged for at least five years or until you reach 59½, whichever is later; breaking the series triggers the 10% penalty retroactively on every payment, plus interest.
With the default inputs, the annual sepp payment (chosen method) is $30,156.12. Change any value above to recalculate instantly.
How to use the 72(t) sepp calculator
- 1Enter the balance of the IRA or plan you will draw from.
- 2Enter the age you reach on your birthday in the first distribution year.
- 3Enter an interest rate — 5% is always permitted; higher only if 120% of the mid-term rate is higher.
- 4Compare the three methods and pick the one whose payment fits your budget.
- 5Check how many years the series must continue and keep the payment unchanged until then.
Formula and method
The fixed amortization method spreads the balance B over the life expectancy LE for your age as a level annual payment at interest rate i, exactly like a loan payment. The fixed annuitization method divides the balance by an annuity factor ä(x): the present value of $1 a year paid at the start of each year for life, built from the IRS mortality rates in Treas. Reg. §1.401(a)(9)-9(e) and the same interest rate. Both fixed methods lock in the first-year payment for every later year.
The RMD method divides the current balance by the life expectancy for your age each year, so the payment changes with the account value and is usually much smaller. The required period is the later of five years after the first payment or the date you reach 59½. The balance projection assumes payments at the start of each year and a constant return.
- B
- Account balance used for the calculation
- i
- Interest rate (≤ greater of 5% or 120% of the federal mid-term rate)
- LE(x)
- Life expectancy at age x from the Single Life or Uniform Lifetime Table
- ä(x)
- Life annuity factor at age x from the IRS mortality table
Worked examples
$500,000 IRA at 50, fixed amortization at 5%
The Single Life Table gives 36.2 years at age 50. Amortizing $500,000 over 36.2 years at 5% gives about $30,156 a year ($2,513 a month). The annuity factor at 5% is about 16.86, for $29,653 a year, while the RMD method starts at $500,000 ÷ 36.2 = $13,812. Payments must run about 9.5 years, until 59½.
$300,000 at 55, annuitization at 4.5%
At 55 the mortality-based annuity factor at 4.5% is about 16.85, so the fixed annuitization payment is $300,000 ÷ 16.85 ≈ $17,807 a year, slightly below the $17,972 amortization payment over 31.6 years. Because 59½ is less than five years away, the series must last the full five years.
$400,000 at 52, RMD method on the Uniform Lifetime Table
The Uniform Lifetime Table in Notice 2022-6 gives 46.5 years at age 52, so the first-year RMD-method payment is $400,000 ÷ 46.5 = $8,602. It is recalculated each year from the new balance and the next factor.
Frequently asked questions
What is a 72(t) SEPP?+
Internal Revenue Code section 72(t)(2)(A)(iv) waives the 10% early-withdrawal penalty on a series of substantially equal periodic payments taken over your life expectancy. Ordinary income tax still applies to pre-tax money.
How long must 72(t) payments last?+
Until the later of five years after the first payment or the date you reach age 59½. Someone starting at 50 must continue for about 9½ years; someone starting at 57 must continue for five full years.
What interest rate can I use for 72(t)?+
Notice 2022-6 allows any rate up to the greater of 5% or 120% of the federal mid-term rate for either of the two months before the first payment. A higher rate produces a larger fixed payment.
Which 72(t) method gives the largest payment?+
Fixed amortization with the Single Life Table usually gives the largest payment, followed closely by fixed annuitization. The RMD method gives the smallest payment and varies each year with the balance.
Can I change my 72(t) payment?+
You may make one switch from a fixed method to the RMD method without penalty. Any other change, extra withdrawal or added contribution to the account is a modification that triggers the 10% penalty on all prior payments, plus interest.
Can I use 72(t) on a 401(k)?+
Yes, but for an employer plan you must have separated from service first. Many people roll the 401(k) into an IRA so they can size the account. If you leave your job in or after the year you turn 55, the rule of 55 may be simpler.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.