72(t) SEPP Calculator
Withdraw from your IRA or 401(k) before age 59½ without the 10% penalty.
- Free forever
- All 3 IRS methods
- Current rates
Your Information
Must be under 59½ to use 72(t)
Balance in account(s) you'll use for 72(t)
Max allowed: 5.00% (120% of mid-term AFR or 5%, whichever is greater)
Your actual investment return assumption
IRS Table I - Based solely on your age. Most common for 72(t).
SEPP Commitment Period
Starting at age 52, your SEPP must continue until age 59.5 (8 years). That's the later of 5 years or reaching age 59½. Modifying payments triggers a 10% penalty on all prior distributions.
Annual Distribution Comparison
All three IRS-approved methods side by side
$14,577
$1,215/month
Recalculates annually based on account balance
$30,773
$2,564/month
Fixed payment based on life expectancy & interest rate
$29,752
$2,479/month
Fixed payment using IRS mortality tables
Amortization gives you $16,196/year more than RMD
Account Balance Projection
Using Fixed Amortization method with 6% expected growth
| Year | Age | Start Balance | Withdrawal | Growth | End Balance |
|---|---|---|---|---|---|
| 2026(SEPP) | 52 | $500,000 | -$30,773 | +$28,154 | $497,381 |
| 2027(SEPP) | 53 | $497,381 | -$30,773 | +$27,997 | $494,605 |
| 2028(SEPP) | 54 | $494,605 | -$30,773 | +$27,830 | $491,662 |
| 2029(SEPP) | 55 | $491,662 | -$30,773 | +$27,653 | $488,543 |
| 2030(SEPP) | 56 | $488,543 | -$30,773 | +$27,466 | $485,237 |
| 2031(SEPP) | 57 | $485,237 | -$30,773 | +$27,268 | $481,732 |
| 2032(SEPP) | 58 | $481,732 | -$30,773 | +$27,058 | $478,017 |
| 2033(SEPP) | 59 | $478,017 | -$30,773 | +$26,835 | $474,079 |
| 2034 | 60 | $474,079 | -$30,773 | +$26,598 | $469,905 |
| 2035 | 61 | $469,905 | -$30,773 | +$26,348 | $465,480 |
| 2036 | 62 | $465,480 | -$30,773 | +$26,082 | $460,790 |
| 2037 | 63 | $460,790 | -$30,773 | +$25,801 | $455,818 |
| 2038 | 64 | $455,818 | -$30,773 | +$25,503 | $450,549 |
| 2039 | 65 | $450,549 | -$30,773 | +$25,187 | $444,963 |
| 2040 | 66 | $444,963 | -$30,773 | +$24,851 | $439,041 |
Showing first 15 years of 18 year projection
SEPP Period
8 years
Until age 59.5
Total withdrawals (SEPP)
$246,181
Over 8 years
Est. balance at 59½
$474,079
At 6% growth
Understanding the Three Methods
Required Minimum Distribution (RMD)
Divides your account balance by your life expectancy factor each year. Payments vary annually as your balance and age change. Generally produces the lowest initial payment but adjusts over time.
Fixed Amortization
Calculates a level payment like a mortgage, using your balance, life expectancy, and chosen interest rate. Payment stays fixed for the entire SEPP period. Often produces the highest payment.
Fixed Annuitization
Divides your balance by an annuity factor from IRS mortality tables. Like amortization, payments are fixed. Usually produces a payment between RMD and amortization.
Important Considerations
- One-time election: You can switch from amortization or annuitization to RMD once, but not the reverse.
- No modifications: Any change to payments (except the one-time switch) triggers the 10% penalty retroactively.
- Separate accounts: You can set up 72(t) with just a portion of your IRA by rolling that amount into a separate IRA first.
Frequently Asked Questions
What is a 72(t) distribution?
IRS Section 72(t) allows you to withdraw from retirement accounts before age 59½ without the 10% early withdrawal penalty. You must commit to substantially equal periodic payments (SEPP) for at least 5 years or until age 59½, whichever is longer. This strategy is popular among early retirees and those pursuing FIRE (Financial Independence, Retire Early).
Which 72(t) method should I choose?
Each method has different characteristics:
- RMD Method: Lowest initial payment, recalculates each year. Good if you want flexibility and expect your balance to fluctuate.
- Fixed Amortization: Usually the highest payment. Level payments like a mortgage. Most popular choice.
- Fixed Annuitization: Middle-ground payment. Uses IRS mortality tables. Similar to amortization but often slightly lower.
Tip: You can make a one-time switch from amortization or annuitization to RMD if your circumstances change.
What interest rate can I use?
The IRS allows any rate up to 120% of the federal mid-term applicable rate (AFR) for either of the two months before you start, or 5%, whichever is greater. Higher rates produce higher payments with the amortization and annuitization methods. The current January 2026 120% mid-term AFR is 4.57%, so the effective maximum is 5.0%.
What if I need to change my payments?
Warning: Modifying your SEPP before the required period ends triggers the 10% penalty retroactively on all prior distributions, plus interest. The only exception is a one-time switch from amortization or annuitization to the RMD method. Death or disability are the only other exceptions. Plan carefully before starting!
Can I use 72(t) with only part of my retirement savings?
Yes! A common strategy is to roll over only the amount you need into a separate IRA, then set up 72(t) on that account. This lets you control your distribution amount by choosing how much to include. Your other retirement accounts grow untouched until you turn 59½.
72(t) vs. Roth Conversion Ladder — which is better?
Both strategies let early retirees access retirement funds penalty-free:
- 72(t): Immediate access, but locked into payments for 5+ years. Good for consistent income needs.
- Roth Ladder: Requires 5-year waiting period per conversion, but offers more flexibility. Good if you have other funds to bridge the gap.
Many early retirees use both strategies together — 72(t) for immediate income while building their Roth ladder.
How to Set Up a 72(t) SEPP
Calculate Your Need
Determine how much annual income you need from your retirement accounts before age 59½.
Separate Your IRA
Roll the appropriate amount into a dedicated IRA. This controls your payment size.
Choose Your Method
Select RMD, amortization, or annuitization. Document your calculation method and rate.
Start Distributions
Take your calculated amount annually (or monthly). Continue until 5 years pass AND you reach 59½.
72(t) Strategy Tips
Work with a Tax Professional
72(t) rules are complex and mistakes are costly. Have a CPA or tax advisor review your calculations before starting. Keep detailed documentation of your method, rate, and calculations.
Use Multiple IRAs Strategically
Create separate IRAs for different purposes. One for 72(t), one for emergency reserves, one for long-term growth. This gives you flexibility while protecting your SEPP from accidental modification.
Consider Your Full Timeline
Remember: your SEPP must continue for 5 years OR until 59½, whichever is LONGER. Starting at 50 means 9.5 years of locked payments. Starting at 57 means only 5 years.
Account for Market Volatility
If using amortization with a high assumed growth rate, a market crash could deplete your account. Consider being conservative, or use the RMD method which adjusts automatically.
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