72(t) SEPP Calculator
A 72(t) SEPP (substantially equal periodic payments) lets you tap a retirement account before age 59½ without the 10% early-withdrawal penalty. This uses the amortization method to estimate your annual distribution.
Your details
- Monthly distribution
- $2,710.48
- Total over 5 years
- $162,628.59
Formula
Amortization method: the balance is spread into level annual distributions over your life expectancy at the chosen interest rate — the same math as amortizing a loan.
How it works
Once you start a 72(t) plan you must keep taking the same distributions for at least five years or until age 59½, whichever is longer — changing or stopping early triggers retroactive penalties. It's powerful but rigid, so plan carefully.
Frequently asked questions
What is a 72(t) SEPP?⌄
A rule that lets you withdraw from an IRA or 401(k) before 59½ without the 10% penalty, provided you take substantially equal periodic payments for at least five years or until 59½.
What are the three 72(t) methods?⌄
Required minimum distribution, fixed amortization, and fixed annuitization. This calculator uses the amortization method, which usually gives the largest, level payment.
What happens if I stop early?⌄
Modifying or stopping the payments before the required period ends triggers the 10% penalty retroactively on all prior distributions, plus interest. The schedule is strict.
Sources & methodology
Fixed amortization method over life expectancy at the rate entered. Estimate only — the IRS rate cap and life-expectancy tables apply, and the plan must run 5 years or to age 59½. Not tax advice.
- •IRS — SEPP (Rule 72(t)) — IRS
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