72(t) SEPP calculator.

A 72(t) series lets you take money from an IRA, or from a plan you have left, before age 59½ without the 10% tax, as long as you take a formula amount for years. The formula is the easy part. The lock-in is the hard part: change the series or skip a payment and the penalty returns on every payment you took, plus interest. This calculator shows what the two most used methods pay on the first day, and how many years you would be committed.

How each method is calculated

IRS Notice 2022-6 allows three methods for a series that starts in 2023 or later. This tool computes two. RMD method: each year the payment is the account balance divided by the figure from the chosen life expectancy table for your age that year, so the payment moves as the balance and the divisor change. Fixed amortization: the first-year balance is amortised level over the table figure at an allowed interest rate, and the same payment repeats every year. The calculator uses ordinary annuity timing (payments at the end of each year), which is the common textbook convention, and the table is either the Uniform Lifetime Table in Appendix A of the notice or the Single Life Table.

The interest rate for amortization 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 the first payment. The third method, fixed annuitization, needs the mortality rates in the regulations and is not calculated here.

Once you start, payments must continue until the later of five years after the first payment or the day you reach 59½. Anything that changes the series, such as adding money to the account other than by investment gains, moving part of it elsewhere or rolling a payment over, is a modification and triggers the recapture tax.

Worked examples (hypothetical figures, real rules)

RMD method. You are 50 with $500,000. The Uniform Lifetime divisor at 50 is 48.5, so the first payment is $10,309.28. With the Single Life Table the divisor is 36.2 and the payment is $13,812.15. You must take 10 annual payments (to your 59½ date), because that is later than five years.

Fixed amortization at 5%. With the same $500,000 and the Uniform divisor of 48.5, the payment is $27,588.49 every year. With the Single Life Table divisor of 36.2 it is $30,156.12. Amortization pays far more than the RMD method at the same age because its formula assumes the account earns the interest rate you choose.

A rate above 5%. If 120% of the federal mid-term rate for one of the two allowed months is above 5%, a higher rate is permitted. The calculator warns you whenever you enter more than 5% because it cannot look that rate up for you.

Mistakes people make

• Stopping after five years. If you are under 59½ when the fifth anniversary arrives, the series continues until 59½.
• Adding money to the account. A contribution or transfer in is a modification. Keep a dedicated IRA for the series.
• Choosing a rate above the cap. The cap is the greater of 5% or 120% of the mid-term rate, checked for the two months before the first payment.
• Taking a different amount than the method gives. A change to the series is a modification.

Who this is for, and what it does not cover

It suits someone who wants a rough payment size before talking to a tax adviser. It does not compute the fixed annuitization method, joint life tables with a designated beneficiary, balance dates, partial-year first payments, or how a custodian rounds. One-time switches from amortization or annuitization to the RMD method are allowed, and the notice lists other special rules. A series from a plan you have left requires that you separate from service before payments begin.

Sources

Retrieved 2026-10-26. Each link was opened and checked against the claim next to it.

• IRS Notice 2022-6: Determination of substantially equal periodic payments: the three methods, the tables in Appendix A, the interest-rate cap, balance rules, modification and the one-time switch.
• IRS Topic no. 558: Additional tax on early distributions from retirement plans other than IRAs: the separation requirement for plan SEPPs and the exception list.
• 26 U.S.C. 72(t): the 10% additional tax and its exceptions: section 72(t)(2)(A)(iv) and the recapture tax in 72(t)(4).