72(t) SEPP calculator
Substantially equal periodic payments by the RMD, amortization and annuitization methods from IRS Notice 2022-6.
- ๐บ๐ธ US federal & state rules
- IRS SEPP rules and life expectancy tables
- See sources
Yearly payment, fixed amortization
$30,772.60
$2,564.38 a month. Keep it up until at least age 59 and a half.
- RMD method
- $14,577.26
- Fixed amortization
- $30,772.60
- Fixed annuitization
- $30,308.17
- Rate cap
- 5%
This is an example. Enter your numbers above and press the button to see your own result.
- An estimate, not tax advice. Payments are still taxed as income; the 72(t) exception only removes the 10% early withdrawal tax.
- Changing the payments before the later of 5 years from the first payment or age 59 and a half brings back the 10% tax on every earlier payment, plus interest. One switch from a fixed method to the RMD method is allowed.
- Do not add money to the account or roll part of it out once payments start. Either counts as a change.
- Enter 120% of the federal mid-term rate to see if you can use a rate above 5%. IRS posts it monthly in the Applicable Federal Rates tables.
- Fixed amortization assumes payments at the end of each year, and annuitization assumes the first payment now. Your custodian or tax adviser may use a slightly different convention.
Show the math
| Single Life factor at 52 | 34.3 |
|---|---|
| RMD method | $500,000.00 รท 34.3 = $14,577.26 (recalculated each year) |
| Fixed amortization | $500,000.00 paid off over 34.3 years at 5% = $30,772.60 a year |
| Annuity factor | 16.4972 (IRS mortality table, 5%) |
| Fixed annuitization | $500,000.00 รท 16.4972 = $30,308.17 |
What to do next
How it works
The RMD method divides the balance by your life expectancy factor for that year, and it is refigured every year, so the payment moves with the account. The fixed amortization method pays the balance off like a loan over your life expectancy at the chosen interest rate. The fixed annuitization method divides the balance by an annuity factor built from the IRS mortality table and the same interest rate.
Both fixed methods lock in the first year's payment for every year after. Life expectancy factors come from the Single Life Table in IRS Publication 590-B or the Uniform Lifetime Table in Notice 2022-6.
Things to keep in mind
You can split an IRA first and run 72(t) on only part of your money. That lets you size the payment you need while the rest stays flexible.
Once payments start, adding money to the account, moving part of it to another plan, or rolling over a payment all count as a change under Notice 2022-6. Running out of money because you followed the schedule does not.
Sources
Rules applied as of 2023-01-01. See the sources below for details.
- IRS Notice 2022-6, Determination of substantially equal periodic paymentsChecked 2026-10-19
- 26 CFR 1.401(a)(9)-9(e) mortality rates (Cornell LII)Checked 2026-10-19
- IRS Publication 590-B (2025), Substantially equal periodic payments and Table IChecked 2026-10-19
- IRS Applicable Federal Rates (monthly revenue rulings)Checked 2026-10-19
Frequently asked questions
What is a 72(t) distribution?
It is a series of substantially equal periodic payments from an IRA that avoids the 10% tax on withdrawals before 59 and a half. You must follow one of three IRS methods and keep payments going for 5 years or until 59 and a half, whichever is later.
What interest rate can I use?
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. With 120% of mid-term below 5%, the cap is 5%.
Which 72(t) method gives the biggest payment?
Usually fixed amortization or annuitization with the Single Life Table. On $500,000 at age 52 and 5%, amortization pays about $30,800 a year while the RMD method pays about $14,600.
Can I change my 72(t) payment?
You can make one switch from a fixed method to the RMD method. Any other change before the deadline brings back the 10% tax on all earlier payments, plus interest.