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72(t) Distribution Calculator

Calculate Substantially Equal Periodic Payments (SEPP) under IRS Rule 72(t) to access retirement funds before age 59½ without the 10% early withdrawal penalty.

72(t) is used for early distributions before age 59½.
IRS allows a rate ≤ 120% of the federal mid-term rate.

Results

Life Expectancy Factor34.2 years
RMD Method (annual)$14,619.88
Fixed Amortization Method (annual)$30,544.03
Fixed Annuitization Method (annual)$14,985.38

📖What is it?

A 72(t) SEPP calculator that estimates penalty-free early distributions from retirement accounts before age 59½. The IRS offers three approved methods: the RMD method (recalculated annually), Fixed Amortization, and Fixed Annuitization. Each produces a different annual distribution amount.

🎯How to use

Enter your IRA or 401(k) balance, your age, and a reasonable interest rate (the IRS caps this at 120% of the federal mid-term rate). The calculator shows the annual distribution under all three methods so you can choose the one that best fits your needs.

💡Example scenario

A 50-year-old with $500,000 at 5% interest: the RMD method yields ~$14,620/year, Fixed Amortization yields ~$32,500/year, and Fixed Annuitization yields ~$14,985/year. The Amortization method typically produces the highest payments.

🏆Pro tip

Once you start 72(t) distributions, you MUST continue for 5 years or until age 59½ (whichever is longer). Modifying the payments triggers retroactive 10% penalties on ALL prior distributions. Plan carefully before committing.