Substantially equal periodic payments (SEPP) under IRS rule 72(t) let you take money from an IRA or retirement plan before 59½ without the 10% early withdrawal penalty. Enter your balance, age and interest rate to compare the annual distribution under the RMD, amortization and annuitization methods, how long you must keep them up, and how the balance may hold up.
Last updated:
Account & age
$
IRA or plan balance on a reasonable date before the first payment.
%
Up to the greater of 5% or 120% of the federal mid-term rate.
% / yr
Only for the projection table.
Optional overrides
Blank = Single Life Table. Enter a Uniform Lifetime or Joint Life factor to use it.
Blank = estimate. Enter the factor from the Notice 2022-6 mortality table for an exact result.
Enter your values to see the result.
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How to use the 72(t) SEPP Calculator
Enter the account balance you will base the SEPP on.
Enter your age as of your birthday in the year of the first distribution.
Enter the interest rate, up to the greater of 5% or 120% of the federal mid-term rate.
Optionally override the life expectancy or annuity factor if you use another table or the official mortality table.
Compare the three payments and check the projection through the end of the required period.
The three 72(t) methods compared
Method
Formula
Payment over time
Typical size
RMD
Balance ÷ life expectancy (recalculated yearly)
Changes every year with the balance and age
Smallest
Amortization
B × r ÷ (1 − (1 + r)−LE)
Fixed
Largest
Annuitization
Balance ÷ annuity factor (mortality table + rate)
Fixed
Close to amortization
Example: $500,000 at age 50 and 5%
Single Life Table factor at 50 = 36.2
RMD method: $500,000 ÷ 36.2 = $13,812 in the first year
Amortization: $500,000 × 0.05 ÷ (1 − 1.05−36.2) = $30,156 a year
Annuitization: about $29,700 a year with an estimated factor near 16.86
Because the person is 50, payments must continue for about 10 years until age 59½.
Single Life Table factors for common SEPP ages
Age
Factor
Age
Factor
Age
Factor
40
45.7
47
39.0
54
32.5
41
44.8
48
38.1
55
31.6
42
43.8
49
37.1
56
30.6
43
42.9
50
36.2
57
29.8
44
41.9
51
35.3
58
28.9
45
41.0
52
34.3
59
28.0
46
40.0
53
33.4
60
27.1
Source: IRS Single Life Table in Treas. Reg. §1.401(a)(9)-9(b), used for distribution years 2022 and later. Rules reflect IRS Notice 2022-6.
Common SEPP mistakes to avoid
Taking an extra withdrawal or skipping a payment from the SEPP account.
Adding money to the account (contributions or rollovers in) during the SEPP period.
Stopping one year too early: the 5-year clock runs from the first payment date, not the calendar year.
Using too large an account. Splitting off a separate IRA sized for the payment you need keeps the rest flexible.
Frequently asked questions
What is a 72(t) SEPP?
Section 72(t)(2)(A)(iv) of the Internal Revenue Code waives the 10% additional tax on early distributions from IRAs and qualified plans if you take a series of substantially equal periodic payments based on your life expectancy. The payments are still taxed as ordinary income; only the 10% penalty is avoided.
How are the three SEPP methods calculated?
RMD method: balance ÷ life expectancy factor, recalculated every year. Amortization method: the balance is amortized over your life expectancy at the chosen interest rate, giving a fixed payment B × r ÷ (1 − (1 + r)^−n). Annuitization method: balance ÷ an annuity factor based on the IRS mortality table and the interest rate, also a fixed payment.
What interest rate can I use for 72(t)?
Under IRS Notice 2022-6, the rate for the amortization and annuitization methods can 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 month of the first distribution. A higher rate produces a larger payment.
How long must SEPP payments continue?
Until the later of 5 years after the first payment or the date you reach age 59½. Changing the amount (other than a one-time switch to the RMD method), adding to or taking extra from the account, triggers the 10% penalty retroactively on all earlier payments, plus interest.
Which life expectancy tables are allowed?
Notice 2022-6 allows the Single Life Table, the Uniform Lifetime Table or the Joint and Last Survivor Table from the 2022 regulations. This calculator uses the Single Life Table by default; enter a different factor in the override field to use another table.
Is the annuitization result exact?
Not by default. The official annuity factor comes from a mortality table in Notice 2022-6. This calculator estimates it from survival rates implied by the Single Life Table, which usually lands close; for a filing-ready figure, enter the official annuity factor in the override box.
Should I set up a 72(t) plan on my own?
SEPP plans are strict and mistakes are costly, so many people use a separate IRA holding only the amount needed for the desired payment, and confirm the calculation with a tax professional or their IRA custodian before the first distribution.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.