SEPP / 72(t) Calculator: How to Use It
Section 72(t) of the tax code lets you access retirement funds before 59.5 without the 10% penalty, as long as you take substantially equal periodic payments and don't deviate for years.
What this calculator does
The SEPP Calculator computes your annual and monthly payment under the IRS method you pick, using your account balance, your age and the interest rate you enter. Switch methods and rerun to compare them.
It also shows the Single Life Table factor used and the age when the commitment ends. It doesn't project your account balance.
What each input means
Account balance
The balance of the specific IRA or retirement account you're running SEPP from. Use the balance on the date you plan to start the plan, or the most recent statement balance. If you're planning to segregate a portion of your IRA into a new account for SEPP purposes, use the amount you intend to put in that account.
Notice 2022-6 treats the balance as reasonable if it's the balance on any date from December 31 of the year before the first distribution through the date of the first distribution.
Your age at first distribution
Your age on your birthday in the year of the first SEPP payment (Notice 2022-6, section 3.02(a)). It sets the life expectancy used by the RMD and amortization methods and the starting age of the annuity factor. A younger starting age produces smaller payments (longer life expectancy) and a longer required continuation period. If you start at 50, you must continue SEPP until 59.5, which is 9.5 years.
Interest rate
You can use any rate up to the greater of 5% or 120% of the federal mid-term rate for either of the two months immediately before the month of your first distribution. Notice 2022-6 set that rule and replaced Revenue Ruling 2002-62, which capped the rate at 120% of the mid-term rate with no 5% floor. The 120% mid-term rate was 5.23% for August 2026 (Rev. Rul. 2026-13), 5.40% for September 2026 (Rev. Rul. 2026-17) and 5.54% for October 2026 (Rev. Rul. 2026-19). The calculator defaults to 5.40%, the cap for a first distribution in October 2026. For the RMD method, the rate doesn't apply.
The three methods compared
Required Minimum Distribution method
Divides your account balance by your life expectancy from the IRS table you chose (this calculator uses the Single Life Table) each year. Payments change annually as the balance and factor change. This produces the smallest and most variable payments. The payment moves with the account balance. You still can't stop early.
Fixed Amortization method
Calculates a fixed annual payment that amortizes your starting balance over your life expectancy at your chosen rate. The payment never changes regardless of account performance. It produces larger payments than the RMD method.
Fixed Annuitization method
Divides the balance by an annuity factor: the present value of $1 a year for life, first payment at your current age, using the mortality rates in Treas. Reg. 1.401(a)(9)-9(e) and your chosen rate (Notice 2022-6, section 3.01(c)). The payment is fixed. For $500,000 at age 50 and 5.40%, annuitization gives $31,105 a year and amortization gives $31,727.
The modification rule and why it matters
If you modify the SEPP plan before completing the required period, the 10% additional tax is charged on every prior distribution, plus interest for the deferral period. Modifications include stopping distributions, changing a fixed amount, adding money to the SEPP account other than investment gains, transferring money out of it, or taking an extra withdrawal. A one-time switch from either fixed method to the RMD method is allowed (Notice 2022-6, section 3.03(b)). Keep a dedicated SEPP account separate from accounts you might need to touch.
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Frequently asked questions
What are the three SEPP calculation methods?
Required Minimum Distribution (smallest, variable payments recalculated each year), Fixed Amortization (fixed payment based on balance and interest rate), and Fixed Annuitization (fixed payment from an annuity factor built on IRS mortality rates, close to amortization). At current rates Fixed Amortization gives the highest fixed payment.
What is the 5-year and 59.5 rule?
You must continue SEPP without modification for the longer of five years or until you reach 59.5. Start at 52 and you're locked in until 59.5 (7.5 years). Start at 57 and you're locked in until 62 (5 years). This is a hard commitment.
Which interest rate do I use?
Any rate up to the greater of 5% or 120% of the federal mid-term rate for either of the two months immediately before the month of your first distribution (Notice 2022-6, section 3.02(c)). For an October 2026 start that cap is 5.40%; for a November 2026 start it is 5.54%. The IRS publishes the rates monthly in revenue rulings on irs.gov. A higher rate produces larger payments.
Can I use SEPP on just one of my IRAs?
Yes. SEPP applies per account. Segregate the funds you want to access into a dedicated account and run SEPP on that account only. Don't add money to, transfer money out of, or take extra withdrawals from the SEPP account during the required period (Notice 2022-6, section 3.02(e)).
What happens if I modify the plan early?
The 10% additional tax is charged on every prior distribution in the series, plus interest for the deferral period (IRC 72(t)(4)). Death and disability are exceptions. SEPP requires strict discipline. If there's any chance you'll need the money irregularly, SEPP isn't the right tool.