SEPP / 72(t) calculator
Substantially Equal Periodic Payments (Rule 72(t)) let you tap a Traditional IRA penalty-free before age 59½, with a 5-year-or-59½ commitment. This calculator shows what your annual payment would be under the three IRS-approved methods.
Annual SEPP payment
$25,850
~$2,154/mo
Commitment window
10 years
5-years-or-59½, whichever is later
Total over commitment (nominal)
$258,496
Before tax. Subject to ordinary income tax.
Method: Fixed Amortization method (most common; payment fixed at start)
Educational estimate. Actual SEPP payments require IRS Pub 590-B tables for your exact age + Method, plus the AFR published monthly. This calculator approximates — confirm with your CPA before relying on the number.
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FAQ
- Why are there three methods?
- IRS Notice 2022-6 lists three approved calculation methods: RMD (recalculates yearly, lowest payment), Fixed Amortization (most common, payment fixed at start), and Fixed Annuitization (uses an annuity factor). Pick the one whose payment matches your spending need; you can switch from amortization/annuitization → RMD method ONCE without busting the schedule.
- What rate can I use?
- The greater of 5% OR 120% of the federal mid-term Applicable Federal Rate (AFR) for either of the two months immediately before the first distribution. 5% is a floor, not a cap — when 120% AFR is above 5% (often the case), use the higher rate to get a higher allowed payment.
- What happens if I bust the schedule?
- Modifying the amount, stopping early, or taking an extra distribution within the 5-years-or-59½ window triggers the IRS to retroactively assess the 10% early-withdrawal penalty on every prior SEPP distribution, plus interest. SECURE 2.0 §323 (2024) softened a few specific edge cases (partial-transfer relief).
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Educational guidance only. Not legal, tax, or individualized investment advice. We do not recommend individual securities or guarantee outcomes.