72(t) SEPP Calculator
Last verified · Methodology
Enter the IRA balance you plan to use and your age at the first payment. The payment comes from the IRS Single Life Table and the rate rules in Notice 2022-6.
Your IRA and plan
Only the IRA you run the SEPP from. You can split an IRA first to control the payment size.
Single Life Table life expectancy: 36.2 years
Up to 5% is always allowed. Higher only if 120% of the federal mid-term rate is higher.
Used only to project the RMD method, whose payment is recalculated every year.
Fixed amortization payment
$36,187 / year
$3,016 a month, the same amount every year, penalty free. You must keep taking exactly this until age 59½, which is 9.5 years from your first payment.
RMD method, first year
$16,575
$1,381 a month, recalculated yearly
Required payments
10
Until the later of 5 years or age 59½
Amortization, total over the period
$361,873
Balance left after: about $568,912
RMD, total over the period
$215,752
At 6% assumed growth
RMD method, year by year
| Age | Start balance | Payment |
|---|---|---|
| 50 | $600,000 | $16,575 |
| 51 | $618,431 | $17,519 |
| 52 | $636,966 | $18,570 |
| 53 | $655,500 | $19,626 |
| 54 | $674,026 | $20,739 |
| 55 | $692,484 | $21,914 |
| 56 | $710,804 | $23,229 |
| 57 | $728,830 | $24,457 |
| 58 | $746,635 | $25,835 |
| 59 | $764,048 | $27,287 |
Uses the Single Life Table. The fixed annuitization method is not modeled here; it needs the IRS mortality table and usually lands close to the amortization figure.
The three IRS methods
Required minimum distribution (RMD)
Divide the balance by your life expectancy from the table, and repeat every year with the new balance and the new age. The payment moves with the market and is always the smallest of the three.
Fixed amortization
Amortize the starting balance over your life expectancy at the chosen interest rate, like a loan in reverse. The payment is set once and stays level for the whole period. This is the method most early retirees use because it produces a usable income.
Fixed annuitization
Divide the balance by an annuity factor built from the IRS mortality table and the same interest rate. It is also level and usually lands close to amortization. This calculator does not model it because the mortality table is too large to reproduce accurately here; run it with your custodian if you are choosing between the two fixed methods.
How long you are locked in
| Age at first payment | Must continue until | Length |
|---|---|---|
| 45 | 59½ | 14.5 years |
| 50 | 59½ | 9.5 years |
| 54 | 59½ | 5.5 years |
| 55 | 60 | 5 years |
| 57 | 62 | 5 years |
Starting younger means a longer commitment. A 45-year-old is signing up for fourteen and a half years of fixed withdrawals with no room to adjust if their situation changes.
What counts as breaking the plan
- Taking more or less than the calculated payment in any year.
- Adding contributions to the SEPP IRA, or rolling money into it.
- Transferring or rolling part of the balance out.
- Stopping payments before the required period ends.
Any of these triggers recapture: the 10% tax on every earlier payment, plus interest. Death and disability are exceptions. The only change allowed is a one-time switch from a fixed method to the RMD method, which is a pressure valve if markets fall hard and the fixed payment starts draining the account too fast.
Sizing the payment with a split IRA
The payment is a function of the balance, so the usual approach is to split an IRA before starting: move exactly enough into a dedicated IRA to produce the payment you need, and leave the rest untouched in a second IRA. That keeps flexibility in the untouched account, which you can still add to or withdraw from later without affecting the SEPP.
Other ways to reach retirement money early
A SEPP is one of several bridges. If you leave your job in or after the year you turn 55, the Rule of 55 lets you withdraw from that employer's 401(k) without penalty and without a fixed schedule. A Roth conversion ladder trades a five-year wait for complete flexibility. To see how much you need before any of these matter, start with the FIRE number calculator, or check whether you can already stop contributing with the Coast FIRE calculator.
A series of substantially equal periodic payments (SEPP) is an exception under section 72(t) of the tax code that lets you take money from an IRA before age 59½ without the 10% additional tax. You commit to a payment calculated by one of three IRS-approved methods and keep taking it on schedule. The withdrawals are still ordinary income; only the 10% penalty is waived.
Until the later of five years from the first payment or the date you reach 59½. Someone starting at 50 must continue until 59½, which is nine and a half years. Someone starting at 57 must continue for five full years, to 62, even though they pass 59½ along the way.
Under IRS Notice 2022-6, 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. The 5% option is always available, which is why it is the common choice. A higher rate produces a larger fixed payment under the amortization method.
Usually fixed amortization or fixed annuitization, which produce similar figures and stay the same every year. The RMD method gives a much smaller payment because it divides the balance by life expectancy with no interest factor, and it changes each year. At age 50 with $400,000, the IRS example shows about $11,050 under RMD against about $21,102 under amortization at 4%.
Any modification before the required period ends triggers a recapture tax equal to the 10% penalty that would have applied to every prior payment, plus interest. Modifications include changing the payment, adding money to the IRA, rolling money in or out, or skipping a payment. The one permitted change is a single switch from a fixed method to the RMD method, which lowers the payment.
Yes, but only after you have separated from service with that employer, and the plan has to permit it. Most people roll the 401(k) into an IRA first, which also lets them split the balance so that the SEPP IRA holds only the amount needed for the payment they want. If you left the job in or after the year you turn 55, the Rule of 55 may be simpler than a SEPP.
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