72(t) calculator: substantially equal payments before 59½
A 72(t) series lets you take fixed yearly payments from an IRA at any age without the 10 % additional tax, as long as you never change them until the lock ends.
Fixed amortization: payment per year
$32,285
$2,690 a month · age 50 · rate 5.54 % · locked until December 1, 2035
| Fixed amortization | $32,285 |
| Fixed annuitization | $33,751 |
| Required minimum distribution | $13,812 |
| Life expectancy used | 36.2 years |
| Lock ends because of | age 59½ |
Highest rate for November 2026: 120 % of the mid-term AFR of October 2026 (Notice 2022-6).
Worked out by Radif Partners · How we calculate · figures read on irs.gov and healthcare.gov · not personal financial advice
Section 72(t)(2)(A)(iv) of the tax code removes the 10 % additional tax from a series of substantially equal periodic payments, often called SEPP. IRS Notice 2022-6 accepts three ways to set the yearly amount: the required minimum distribution method (balance divided by life expectancy, recomputed each year), fixed amortization and fixed annuitization (one amount fixed at the start). For the fixed methods the interest rate may not exceed the greater of 5 % and 120 % of the federal mid-term rate of either of the two months before the first payment: 5.54 % for a series starting in November 2026. On a $500,000 IRA at age 50, that gives $13,812 a year under the RMD method, $32,285 under amortization and $33,751 under annuitization. The payments must continue until the later of five years after the first one and age 59½; changing them earlier brings back the 10 % on every past payment, plus interest.
The calculator reproduces the IRS examples to the dollar
The IRS publishes one worked case in its SEPP questions and answers: an IRA owner who turns 50 in the first year, a $400,000 balance, a rate of 4 % and the Single Life Table (IRS SEPP FAQ). The RMD method gives $11,050, fixed amortization $21,102 with a factor of 18.9559, and fixed annuitization $22,030 with an annuity factor of 18.1568. The engine of this page returns those three amounts exactly; they run as automated tests every time the site is built. The annuity factor comes from the mortality rates of 26 CFR 1.401(a)(9)-9(e), the life expectancies from the Single Life Table of the same section (eCFR).
| Method | How the amount is set | $500,000 at 50, 5.54 % | Same at 5 % |
|---|---|---|---|
| Required minimum distribution | balance ÷ life expectancy, every year | $13,812 | $13,812 |
| Fixed amortization | level payment over the life expectancy | $32,285 | $30,156 |
| Fixed annuitization | balance ÷ life annuity factor | $33,751 | $31,523 |
Choosing a method
The RMD method pays the least and moves with the market: a fall in the account lowers next year's payment, which protects the balance but not your budget. The two fixed methods pay more and stay flat, which suits someone who needs a known income for a bridge to 59½. Notice 2022-6 lets you switch once, from a fixed method to the RMD method, without it counting as a change; any other switch breaks the series.
A smaller series is often the better design. Because each series is computed on one account and nothing may be added to or taken from that account outside the payments, many people split an IRA in two before starting: one IRA sized to produce exactly the income they need, the other left free for later. The IRS FAQ confirms that a series is set for a single account and that several accounts cannot be pooled into one payment.
Size the IRA for the income you need
Fixed amortization: payment per year
$19,063
| Fixed amortization | $19,063 |
| Fixed annuitization | $19,862 |
| Required minimum distribution | $7,874 |
| Life expectancy used | 38.1 years |
The rate cap changes every month
The interest rate you choose for the fixed methods raises or lowers the payment. The ceiling is the greater of 5 % and 120 % of the federal mid-term rate published in the revenue rulings of the two months before the first payment. Rates in 2026 rose from 4.57 % in January to 5.54 % in October (Rev. Rul. 2026-19), so the 5 % floor stopped being the binding figure from the summer. The monthly rate table lists every month and its ruling. A lower rate is always allowed: someone who wants a smaller fixed payment can simply pick one.
When the series may stop
The payments must go on until the later of the fifth anniversary of the first payment and the day you reach 59½. Started in November 2026 by someone born in June 1976, the series runs until December 1, 2035, the 59½ date. Started the same month by someone born in March 1969, it runs until November 1, 2031, because the five-year minimum ends later than 59½. The IRS FAQ gives the same two cases with other dates. After the lock ends, withdrawals of any size are allowed, and after 59½ they owe no additional tax anyway.
Rules that catch people
- From a 401(k) or 403(b), the series requires that you have left the employer; from an IRA, it does not.
- No contribution, rollover in or transfer out of the account once the series is set. Investment gains and losses are fine.
- Take the yearly amount in one payment or in monthly installments, but the total for the year must match.
- Income tax is due on every payment; only the 10 % additional tax is removed. Report the exception on Form 5329 if the 1099-R does not show it.
- Keep the paperwork: the balance used, its date, the table, the rate and the ruling it came from. If the IRS asks years later, that sheet proves the amount was computed under one of the three methods.
- Running out of money is not a modification: if the account is exhausted, the last smaller payment does not trigger the recapture.
What happens if you change the payments is detailed on the modification page. For a plan where the series covers only part of the bridge, the early retirement calculator combines it with taxable savings and Roth money year by year.
If the series is broken in year three
Extra tax for modifying the series
$13,914
| Recapture on earlier payments (10 %) | $9,686 |
| 10 % on this year’s withdrawals | $4,229 |