Early-retirement planning72(t) SEPP Calculator

Compare the three IRS calculation methods for substantially equal periodic payments from one retirement account.

Your assumptions

Use the higher 120% federal mid-term rate from either of the two months before payments begin.

Annual comparisonThree permitted methods

Permitted rate ceiling: 5.00%

RMD method

$27,624

$2,302 monthly

Single Life factor
36.2
Formula
Balance ÷ life expectancy
Recalculate each year using the prior year-end balance and attained age.

Fixed amortization

$60,312

$5,026 monthly

PV factor
16.5804
Formula
Balance ÷ PV factor
The annual amount remains fixed after it is established.

Fixed annuitization

$63,046

$5,254 monthly

Annuity factor
15.8615
Formula
Balance ÷ annuity factor
Uses Table 4 mortality rates; the annual amount remains fixed.

A series begun at age 50 generally must continue until the later of the fifth anniversary of the first payment or age 59½.

Important before you act

This educational estimate assumes the Single Life Table, annual end-of-year payments, and one account. The account cannot be combined with another account for one SEPP calculation. Extra contributions, distributions, or an impermissible change can trigger the 10% additional tax and recapture tax plus interest.

Confirm the valuation date, payment timing, applicable federal mid-term rate, and plan eligibility with a qualified tax professional or custodian before starting.

IRS SEPP questions and examples · IRS Notice 2022-6

Common 72(t) questions

Does the largest calculated payment make it the best method?

No. Payment size, account longevity, tax consequences, permitted changes, and the required duration all matter. The calculator compares formulas; it does not select a method for you.

Can the payment series be changed later?

SEPP modifications can have significant tax consequences. IRS Notice 2022-6 describes permitted methods and limited changes. Confirm the current rules with a qualified tax professional before taking a distribution.