72(t) interest rate: the ceiling for each month of 2026
The interest rate behind a fixed 72(t) payment has a ceiling that moves every month, and the month of your first payment fixes it for the life of the series.
Highest interest rate you may use
5.54 %
From October 2026, above the 5 % floor.
| 120 % mid-term, October 2026 (Rev. Rul. 2026-19) | 5.54 % |
| 120 % mid-term, September 2026 (Rev. Rul. 2026-17) | 5.40 % |
| Floor in Notice 2022-6 | 5 % |
| Amortization payment at this rate | $25,828 |
| Same at the 5 % floor | $24,125 |
Worked out by Radif Partners · How we calculate · figures read on irs.gov and healthcare.gov · not personal financial advice
The highest interest rate a 72(t) series may use is the greater of 5 % and 120 % of the federal mid-term rate published for either of the two months immediately before the month of the first payment (IRS Notice 2022-6 and its SEPP questions and answers). In 2026, 120 % of the mid-term rate went from 4.57 % in the Rev. Rul. 2026-2 for January 2026 to 5.54 % in the Rev. Rul. 2026-19 for October 2026. The floor decided every month through July 2026; from August 2026 the published rate took over, and a first payment in November 2026 may use up to 5.54 %. The rate only matters for the two fixed methods. On a $650,000 IRA at age 53, fixed amortization pays $40,423 a year at 5 % and $43,133 at 5.54 %; the RMD method pays $19,461 whatever the rate. Any lower rate is allowed too.
The rule in one sentence, and where it comes from
IRS Notice 2022-6, which governs every series that starts after 2022, caps the rate used by the fixed amortization and fixed annuitization methods. The SEPP questions and answers put it plainly: the rate may not be more than the greater of 5 % or 120 % of the federal mid-term rate published in the IRS revenue rulings on applicable federal rates (AFR) for either of the two months immediately preceding the month of the first payment (IRS SEPP FAQ, Q&A 4). The earlier guidance, Rev. Rul. 2002-62, used 120 % of the mid-term rate alone, with no floor (Notice 2022-6, section 2.06); the worked example in the current FAQ assumes a published figure below the floor and still lets the owner use 4 %, because the floor sits above it.
Each month the IRS publishes a revenue ruling with a table of rates, and 120 % of the mid-term rate is the figure the notice points to. The index page lists them all (IRS applicable federal rates). The table below shows the figure from each 2026 ruling as recorded by this site.
| Ruling month | Revenue ruling | 120 % of mid-term AFR | Above the floor? |
|---|---|---|---|
| January 2026 | Rev. Rul. 2026-2 | 4.57 % | no |
| February 2026 | Rev. Rul. 2026-3 | 4.63 % | no |
| March 2026 | Rev. Rul. 2026-6 | 4.72 % | no |
| April 2026 | Rev. Rul. 2026-7 | 4.59 % | no |
| May 2026 | Rev. Rul. 2026-9 | 4.91 % | no |
| June 2026 | Rev. Rul. 2026-11 | 4.97 % | no |
| July 2026 | Rev. Rul. 2026-12 | 5.23 % | yes |
| August 2026 | Rev. Rul. 2026-13 | 5.23 % | yes |
| September 2026 | Rev. Rul. 2026-17 | 5.40 % | yes |
| October 2026 | Rev. Rul. 2026-19 | 5.54 % | yes |
Two months back, and the higher one wins
The month that counts is the month the first payment reaches you, not the month you sign the paperwork or the month of the account statement used for the balance. From it, you look back two months and take the higher of the two published figures, then compare it with the floor. A series whose first payment arrives in August 2026 looks at July 2026 and June 2026; the higher of the two is 5.23 %, which beats 5 %. One that starts in July 2026 looks at two figures that both sit under the floor, so 5 % applies.
| First payment in | Months looked at | Highest rate allowed | Comes from | Amortization on $650,000 at 53 |
|---|---|---|---|---|
| March 2026 | February, January | 5.00 % | 5 % floor | $40,423 |
| April 2026 | March, February | 5.00 % | 5 % floor | $40,423 |
| May 2026 | April, March | 5.00 % | 5 % floor | $40,423 |
| June 2026 | May, April | 5.00 % | 5 % floor | $40,423 |
| July 2026 | June, May | 5.00 % | 5 % floor | $40,423 |
| August 2026 | July, June | 5.23 % | 120 % mid-term of July 2026 | $41,569 |
| September 2026 | August, July | 5.23 % | 120 % mid-term of August 2026 | $41,569 |
| October 2026 | September, August | 5.40 % | 120 % mid-term of September 2026 | $42,424 |
| November 2026 | October, September | 5.54 % | 120 % mid-term of October 2026 | $43,133 |
The pattern of 2026 has a practical reading. Through the first half of the year, 120 % of the mid-term rate moved between 4.57 % and 4.97 %, always under the floor, so the cap did not move at all: 5 % from March 2026 to July 2026. The Rev. Rul. 2026-12 pushed the figure over the line, and the Rev. Rul. 2026-17 and Rev. Rul. 2026-19 raised it again. Because either of the two prior months may be used, a drop in one month does not lower the cap right away: the previous, higher month stays available for one more month.
Pick the month of your first payment
Highest interest rate you may use
5.23 %
| 120 % mid-term, July 2026 (Rev. Rul. 2026-12) | 5.23 % |
| 120 % mid-term, June 2026 (Rev. Rul. 2026-11) | 4.97 % |
| Floor in Notice 2022-6 | 5 % |
| Amortization payment at this rate | $41,569 |
What a point of interest is worth
The rate works like a discount: a higher rate assumes the account earns more, so the formula lets you take more each year. On the $650,000 example, moving from 5 % to 5.54 % adds $2,710 a year under fixed amortization, about $226 a month, for every year the series runs. The annuitization method reacts in the same direction from a higher base.
| Rate used | Fixed amortization | Fixed annuitization | RMD method |
|---|---|---|---|
| 4.00 % | $35,608 | $37,331 | $19,461 |
| 5.00 % (floor) | $40,423 | $42,465 | $19,461 |
| 5.54 % (November 2026 cap) | $43,133 | $45,333 | $19,461 |
Taking the maximum is not automatically the right design. A higher fixed payment drains the account faster if returns fall short, and the series cannot be lowered later without breaking it, apart from the one-time switch to the RMD method. Some owners pick the cap to need a smaller IRA for the same income and keep the rest in a separate account; others pick a rate under the cap to leave room. Notice 2022-6 allows any rate up to the ceiling, so a round 5 % in a month when 5.54 % is allowed is perfectly valid.
The month of the first payment is fixed for good
Once the first payment is made, the rate and the payment of a fixed method stay the same every year. Rates that rise or fall later change nothing, in either direction. That is why the timing of the first payment deserves a decision: in a year when rates climb month after month, as in 2026, waiting a month can add a little to the ceiling; when rates fall, the two-month look-back gives a short window to lock the earlier, higher figure. The IRS also notes that a series is not considered to have begun until the first payment is made, and that it should begin within the calendar year for which the annual amount was first determined.
What to write down before the first payment
An audit, if one comes, may arrive years later. Keep a single page with the balance used and its date, the life expectancy table, the method, the rate chosen, the two monthly figures it was compared with, and the revenue ruling numbers. The 72(t) calculator shows the rate, its source month and the lock date for the month you select, and the modification page explains what happens if the yearly amount ever changes.