72(t) SEPP Calculator
↻ Updated 2026Calculate your Substantially Equal Periodic Payment under IRC §72(t) using all three IRS-approved methods — RMD, Fixed Amortization, and Fixed Annuitization — and see the 5-year/59½ lock-in before you start a program you cannot unwind.
Educational calculators — always consult a licensed professional before making financial decisions.
RMD recalculates the divisor and the payment every single year, so it moves with the account balance and typically pays the least in year one. Amortization and annuitization both lock in a level payment using this year's balance — amortization spreads it like a loan payoff; annuitization prices it like buying a life annuity, which is why it needs a mortality table and not just a life expectancy number.
This method's payment of $30,486 divides the balance by an annuity factor built from the mortality rates in Treas. Reg. §1.401(a)(9)-9(e)— the table IRS Notice 2022-6 requires for any program starting in 2023 or later. The factor is the present value of $1 a year for as long as you're expected to live, discounted at your chosen rate and weighted by that table's year-by-year survival probability, which is why it differs from the simpler life-expectancy number the other two methods use.
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How to read your SEPP result
Read the warning box before the number. A 72(t) SEPP program is the one early-withdrawal exception that punishes you retroactively if you get it wrong: change the payment, add money to the account, or switch methods more than once, and the IRS treats every distribution you've already taken as if the exception never applied — 10% penalty on all of it, plus interest, in the year you broke it. On the defaults — a $500,000 balance at age 50 — the Fixed Amortization method (the calculator's default view) pays $28,560 a year, locked in for at least 9.5 years, because the program must run until the longer of 5 years or age 59½.
How the three SEPP methods calculate your payment
All three methods start from the same account balance and produce a legal, IRS-safe-harbor annual payment under IRC §72(t)(2)(A)(iv) — but they get there differently, and the gap between them is large. IRS Notice 2022-6 (2022) modified and superseded Rev. Rul. 2002-62 for any SEPP program commencing on or after January 1, 2023; the mechanics below are Notice 2022-6's.
The Required Minimum Distribution method divides the current balance by a life-expectancy divisor every single year — the same shape as an RMD, just running decades earlier. The Fixed Amortization method treats the balance like a loan being paid off in level installments over your life expectancy at a chosen interest rate. The Fixed Annuitization method prices it like buying a life annuity: it divides the balance by the present value of $1/year for as long as you're expected to live, using a mortality table rather than a single life-expectancy number.
1. RMD method (recalculated every year): payment = account balance ÷ Uniform Lifetime Table divisor at current age 2. Fixed Amortization method (set once, for the life of the program): payment = balance × r ÷ (1 − (1 + r)^−n) r = chosen interest rate, n = Uniform Lifetime divisor at starting age 3. Fixed Annuitization method (set once, for the life of the program): payment = balance ÷ annuity factor annuity factor = Σ (probability alive at year k) × (1 + r)^−k, over the mortality table, k = 0 to end of table Interest rate cap (IRS Notice 2022-6): r ≤ greater of 5% or 120% × federal mid-term rate (§1274(d)) for either of the two months before the first distribution
- account balance
- The IRA or plan balance funding the program — valued on any date from Dec 31 of the prior year through the first distribution date
- Uniform Lifetime Table divisor
- Years of expected remaining life at an age — IRS Notice 2022-6, Appendix A — 48.5 at age 50, 53.4 at age 45
- r
- The chosen interest rate — capped at the greater of 5% or 120% of a specific month's federal mid-term rate — see the FAQ below
- annuity factor
- Present value of $1/year for life, from a mortality table — this page uses the mortality rates in Treas. Reg. §1.401(a)(9)-9(e) — the current table under Notice 2022-6
The size of the gap between methods is the whole story. On $500,000 at age 50 and 5.23%, RMD pays $10,309 in year one, amortization pays $28,560, and annuitization pays $30,486. All three are equally legal. The choice is a tradeoff between payment size now and flexibility later — RMD's recalculation means it never counts as a modification even as its number changes every year, while amortization and annuitization lock in today's number for the life of the program, with only one narrow escape hatch: a one-time, irrevocable switch to the RMD method in any later year.
The interest-rate cap is not decoration. IRC §72(t)(2)(A)(iv) does not name a rate; Notice 2022-6 does, and it is published monthly. Anyone amortizing at a rate above that month's cap is not running a safe-harbor SEPP program — they're running an unapproved withdrawal schedule that only stays penalty-free until the IRS notices.
Worked examples
Example: $500,000 at age 50, 5.23% — the calculator's defaults
A 50-year-old IRA owner with $500,000, starting a SEPP program using August 2026's 120% mid-term rate of 5.23% (Rev. Rul. 2026-13).
| Uniform Lifetime divisor at 50Notice 2022-6, Appendix A | 48.5 |
| RMD method payment$500,000 ÷ 48.5 | $10,309.28 |
| Fixed Amortization payment$500,000 × 0.0523 ÷ (1 − 1.0523⁻⁴⁸·⁵) | $28,559.83 |
| Annuity factor (Treas. Reg. §1.401(a)(9)-9(e) mortality rates) | 16.4009 |
| Fixed Annuitization payment$500,000 ÷ 16.4009 | $30,486.20 |
| Program locked in until9.5 years — longer than the 5-year floor | age 59½ |
Three legal numbers from one balance: $10,309, $28,560, or $30,486 a year, depending only on which IRS-approved method is chosen. Whichever one starts is the one that runs for 9.5 years without modification — RMD's number can still move every year, but switching amortization or annuitization to a different rate or a different balance basis is a modification the moment it happens.
Example: $750,000 at age 45 — a longer, more expensive lock-in
A 45-year-old with a larger balance and 14.5 years to run before hitting both the 5-year floor and age 59½ — the same 5.23% rate.
| Uniform Lifetime divisor at 45 | 53.4 |
| RMD method payment$750,000 ÷ 53.4 | $14,044.94 |
| Fixed Amortization payment | $41,984.54 |
| Annuity factor at 45 (Treas. Reg. §1.401(a)(9)-9(e)) | 17.1487 |
| Fixed Annuitization payment$750,000 ÷ 17.1487 | $43,735.12 |
| Program locked in until14.5 years — the age floor dominates, not the 5-year floor | age 59½ |
Five years younger raises the divisor from 48.5 to 53.4 and stretches the mandatory lock-in from 9.5 to 14.5 years. The earlier someone starts a SEPP program, the longer a single number follows them — which is exactly why the lock-in warning belongs at the top of this page, not the bottom.
Frequently asked questions
What happens if I change or stop my 72(t) SEPP payments early?
IRC §72(t)(4) makes the consequence retroactive, not prospective. If the series is modified — a different amount, a different method beyond the one allowed one-time switch to RMD, or any addition to the account other than investment gains — before the later of 5 years from the first payment or age 59½, the exception in §72(t)(2)(A)(iv) is treated as never having applied. Every distribution already taken becomes subject to the 10% additional tax in the year of the modification, plus interest for the deferral period.
The two exceptions are death or disability (Notice 2022-6 §2.04) and complete depletion of the account by faithfully following an approved method — running the account to zero on schedule is not a modification, and the cessation of payments that follows isn't penalized.
How long does a 72(t) SEPP program have to run?
The longer of two floors: 5 years from the date of the first payment, or until the taxpayer reaches age 59½ — whichever ends later. Someone starting at 58 runs the program for the full 5 years even though they'd hit 59½ in 18 months; someone starting at 45 runs it for over 14 years, because the age floor dominates.
There is no way to shorten this by starting smaller or larger payments — the clock is fixed by §72(t)(4) regardless of the method or the payment size chosen.
What interest rate can I use for the amortization or annuitization method?
Under IRS Notice 2022-6, the rate cannot exceed the greater of (i) 5%, or (ii) 120% of the federal mid-term rate under IRC §1274(d) for either of the two months immediately preceding the month the distributions begin. That rate is republished every month in an IRS revenue ruling — it is not a fixed number.
This page's default of 5.23% is 120% of the mid-term rate the IRS published for August 2026 in Rev. Rul. 2026-13 (annual compounding). A program starting in October 2026, for example, could use August or September 2026's published rate instead — look up the current revenue ruling for the actual month rather than reusing this figure.
Which of the three SEPP methods pays the most?
Fixed Annuitization and Fixed Amortization pay more than the RMD method in the early years, because both amortize the balance using an interest rate on top of the life-expectancy math, while RMD is a pure division with no interest credit. On this page's defaults, amortization pays roughly 2.8× what RMD pays in year one.
The tradeoff is flexibility: RMD's payment is recalculated every year and can rise or fall with the account balance without ever counting as a modification. Amortization and annuitization lock in one number for the life of the program — the only escape hatch is a single, irrevocable switch to the RMD method later, which Notice 2022-6 explicitly permits without penalty.
Why is the Fixed Annuitization payment different from Fixed Amortization?
Both lock in a level payment for the life of the program, but they price the balance differently. Amortization spreads it like a loan payoff over a single life-expectancy number — 48.5 years at age 50. Annuitization prices it like buying a life annuity: it sums, for every future year, the probability of still being alive (from the mortality rates in Treas. Reg. §1.401(a)(9)-9(e)) discounted back at the chosen interest rate, then divides the balance by that total.
Because a real mortality curve front-loads high survival probability and only tapers off gradually, the annuitization factor at age 50 and 5.23% works out to 16.4009 — noticeably larger than what amortization implies — which is why annuitization pays more: $30,486 a year on this page's defaults, versus $28,560 for amortization.
Can I access retirement money before 59½ without a 72(t) SEPP program?
Two other routes exist, and both are usually easier to unwind than a SEPP program. A Roth conversion ladder converts traditional balances to Roth in advance and withdraws each year's conversion after it seasons for five years — flexible, but it needs a multi-year runway before you actually need the money. The Rule of 55 lets you draw penalty-free from your most recent employer's 401(k) if you separate from service at 55 or later — it doesn't help before 55, and it's lost permanently the moment that 401(k) is rolled into an IRA.
A SEPP program is the only one of the three that works at any age and doesn't require years of advance planning — which is also why it's the least forgiving if the schedule breaks. The Roth conversion calculator and the FIRE calculator cover the other two pieces of this decision: what a conversion actually costs in tax, and whether the underlying portfolio is large enough to support any of these routes in the first place.
What this 72(t) SEPP calculator doesn't handle
The lock-in mechanics and all three payment formulas are exact. A few edge cases outside the core math are simplified — read this before starting an irrevocable program based on any number from this page.
- Interest rate cap is month-specific — The 5.23% default is 120% of the mid-term rate for August 2026 only. Every calendar month has its own published rate; a program starting in a different month must use that month's rate (or the month before it), not this page's default.
- No joint-life calculation — This page uses single-life figures only. A program based on the joint life expectancy of the owner and a designated beneficiary uses a different table and produces a smaller annual payment.
- No state tax or plan-specific rules — Only the federal 10% early-withdrawal exception is modeled. State conformity to §72(t), plan-specific distribution restrictions, and ordinary income tax on the distributions itself are not.
- The one-time switch to RMD isn't modeled — Notice 2022-6 permits switching from amortization or annuitization to the RMD method once, without penalty. This calculator shows each method's current-year number but doesn't project a mid-program switch.
- Not financial or tax advice — SEPP programs are inflexible by design and the penalty for getting them wrong is retroactive. This is an educational estimate — confirm every number with a CPA or 72(t) specialist before starting a program you can't unwind.
Rates, brackets and limits here are checked against primary sources. If a number still looks off, email support@realmoneyiq.com and we'll review and fix it.
RealMoneyIQ provides free educational calculators, not financial, tax, investment or legal advice. Results are estimates based on the assumptions you enter and publicly published rates; your actual outcome will differ. Always confirm decisions with a licensed professional who knows your full situation.