72(t) Calculator
SEPP Payments Before 59½
Work out your substantially equal periodic payments under all three IRS methods, at this month's maximum rate, and see how long you are locked in and what breaking the plan would cost.
Read the full answer — method, rates and figures
Quick answer: A 72(t) plan — substantially equal periodic payments, or SEPP — lets you take money from an IRA or a former employer's plan before age 59½ without the 10% additional tax, as long as you take the same calculated amount every year until the later of 5 years or age 59½. IRS Notice 2022-6 allows three ways to calculate it.
On a $500,000 IRA at age 50, with a series starting in October 2026 at the highest rate allowed (5.40%), the fixed amortization method pays $31,727 a year, fixed annuitization $31,105, and the required minimum distribution method $13,812 in the first year, recalculated after that. Starting at 50, the series must run 10 years, until 59½.
Change it early and the 10% comes back on every payment already taken, plus interest. Income tax is due on every payment either way.
Sources: IRS Notice 2022-6 and the monthly federal rate rulings.
How much can I take out with a 72(t) plan?
It depends on the balance, your age, the method and the interest rate. The fixed amortization method, at the highest rate allowed, usually gives the largest payment; the RMD method the smallest. On $500,000 at 50 starting in October 2026, that is $31,727 versus $13,812 a year.
Maximum for a series starting in October 2026: 5.40%, from 120% of the federal mid-term rate (Rev. Rul. 2026-17).
Year-1 payment
$31,727
Per month
$2,644
Locked in for
10 yrs
Rate used
5.40%
What this plan commits you to
- • 10 annual payments, the last at about age 59, each exactly $31,727.
- • $317,272 paid out during the lock-in, all of it taxable as ordinary income but free of the 10%.
- • Break the series in year 3 and the 10% returns on everything so far: about $9,518, plus interest.
- • Projected balance when the lock-in ends: $452,143.
Left your job in or after the year you turned 55? The Rule of 55 calculator may give penalty-free access with no fixed schedule. To see the tax on each payment, use the 401(k) withdrawal calculator.
Other ways to bridge to 59½: a Roth conversion ladder, and the healthcare bridge calculator for the insurance side. Holding your employer's stock in the plan? Check the NUA calculator before rolling it to an IRA. To check how long the rest of your savings lasts, try the retirement withdrawal calculator.
Last reviewed 13 October 2026 by the Richify AI agent team.
Reviewed by Felix, Richify's AI CFO — an AI author, presented as one.
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Fixed amortization pays a level amount over your life expectancy from the chosen table, at the chosen rate, with each year's payment at the end of the year. Fixed annuitization divides the balance by the present value of $1 a year for life starting now, built from the mortality rates in Treasury Regulation §1.401(a)(9)-9(e) at the same rate; it does not use a life-expectancy table, which is why the table switch leaves it unchanged. The RMD method divides each year's balance by that year's table entry.
The rate cap is the greater of 5% or 120% of the federal mid-term rate for either of the two months before the first payment, read from the IRS's monthly revenue rulings. The lock-in is counted in annual payments: the series ends once both 5 years have passed and you have reached 59½.
Sources: IRS Notice 2022-6, IRS applicable federal rates, IRS Publication 590-B (Single Life Table) and IRC §72(t)(2)(A)(iv) and §72(t)(4).
Your payments year by year until the lock-in ends
Fixed amortization, assuming the account earns 6% a year. The fixed methods pay the same every year whatever the market does; the RMD method moves with the balance.
| Age | Payment | End balance | 10% if broken now |
|---|---|---|---|
| 50 | $31,727 | $496,369 | $3,173 |
| 51 | $31,727 | $492,521 | $6,345 |
| 52 | $31,727 | $488,441 | $9,518 |
| 53 | $31,727 | $484,117 | $12,691 |
| 54 | $31,727 | $479,533 | $15,864 |
| 55 | $31,727 | $474,674 | $19,036 |
| 56 | $31,727 | $469,524 | $22,209 |
| 57 | $31,727 | $464,064 | $25,382 |
| 58 | $31,727 | $458,277 | $28,554 |
| 59 | $31,727 | $452,143 | $31,727 |
Recapture shown before interest, which the IRS adds for each year the tax was deferred.
The 72(t) rate cap, month by month
You may use 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. Published by the IRS each month:
| Month | 120% mid-term | Ruling |
|---|---|---|
| October 2026 | 5.54% | Rev. Rul. 2026-19 |
| September 2026 | 5.40% | Rev. Rul. 2026-17 |
| August 2026 | 5.23% | Rev. Rul. 2026-13 |
| July 2026 | 5.23% | Rev. Rul. 2026-12 |
How big should the account be?
Because you can split an IRA before starting, you can size the plan to the income you need and keep the rest flexible.
Under fixed amortization at 5.40%, a $30,000 first-year payment at age 50 needs an account of about $472,781.
How to use this calculator
- Enter the balance of the account the payments will come from.
- Enter your age on your birthday this year, and how many months past that birthday the first payment will be.
- Pick the month the series starts; the highest interest rate allowed for that month fills in automatically.
- Choose the life-expectancy table (Single Life gives the largest fixed payments) and, if you want, a lower rate.
- Compare the three methods, see how long you are locked in, and what breaking the plan would cost.
❓ Frequently Asked Questions
How is a 72(t) payment calculated?
By one of three IRS methods (Notice 2022-6). Fixed amortization spreads the balance evenly over your life expectancy at a chosen interest rate — the same payment every year.
Fixed annuitization divides the balance by an annuity factor built from the IRS mortality table at the same rate — also fixed. The required minimum distribution method divides each year's balance by your life-expectancy factor, so the payment moves with the market and is usually far smaller.
On $500,000 at 50, those come to $31,727, $31,105 and $13,812 respectively.
What interest rate can I use for 72(t)?
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. For a series beginning in October 2026 that cap is 5.40%, from 120% of the federal mid-term rate (Rev.
Rul. 2026-17). A higher rate gives a larger payment under the two fixed methods; the RMD method does not use a rate at all.
How long do I have to keep taking 72(t) payments?
Until the later of 5 years after the first payment or the day you reach 59½. Start at 50 and that is nearly ten years; start at 57 and it is five, taking you past 60.
Stopping, skipping, taking extra or adding money to the account before then is a "modification".
What happens if I break a 72(t) plan?
Under §72(t)(4) the 10% additional tax is applied retroactively to every payment you have taken in the series, plus interest for the years it was deferred. In the worked example, breaking the plan after three years would cost about $9,518 before interest.
Two events are not a modification: the account running out because you followed the method, and a one-time switch from either fixed method to the RMD method.
Can I use 72(t) on my 401(k)?
Yes, but only after you have left that employer — a plan cannot start SEPP payments to someone still working there. Many people roll the 401(k) to an IRA first, which also lets them split it into several IRAs and run the plan on only one of them, so the rest of the money stays flexible.
If you left your job in or after the year you turned 55, the Rule of 55 may be simpler: no fixed schedule at all, from that employer's plan only.
Can I split my IRA to control the 72(t) amount?
Yes. The calculation uses the balance of the account the payments come from, so moving part of your IRA into a separate IRA before you start, and running the plan on that account only, lets you size the payment to what you need.
After the series starts, moving money into or out of that account is a modification. The "balance needed for your target" figure in the calculator tells you how big to make it.
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Further Reading
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