72(t) SEPP Calculator: Substantially Equal Periodic Payments (2026)

Money taken from an IRA or a retirement plan before age 59½ normally carries a 10% additional tax. Section 72(t)(2)(A)(iv) of the tax code excepts a series of substantially equal periodic payments, made at least once a year, over your life or life expectancy (or the joint lives of you and a designated beneficiary). Notice 2022-6 says a series counts if it is worked out with one of three methods: the required minimum distribution method, fixed amortization or fixed annuitization. Income tax still applies to taxable money; only the 10% is waived.

The price is the commitment: the payments must continue unchanged until the later of five years after the first payment and your 59½th birthday, as the second question explains.

Usually the fixed methods pay more than the RMD method, which spreads the balance over a long life expectancy and works the amount out again every year. The IRS's own example is a $400,000 IRA at age 50 with the Single Life Table (36.2 years) and a 4% rate: the RMD method gives $11,050, fixed amortization gives $21,102 (the balance ÷ 18.9559) and fixed annuitization gives $22,030 (the balance ÷ 18.1568). The calculator reproduces all three to the dollar.

The fixed methods stay the same every year whatever the account does, so a bad market makes them a bigger share of what is left. The RMD amount moves with the balance and the next year's table number, so it cannot run the account dry, but it is smaller and changes each year. You may change from a fixed method to the RMD method once.

Any rate up to the greater of 5% and 120% of the federal mid-term rate for either of the two months before the month of your first payment (Notice 2022-6, section 3.02(c)). Only the two fixed methods use a rate. A higher rate gives a larger payment: at 5% instead of 4%, the same example gives $24,125 (amortization) and $25,218 (annuitization).

The 120% figures are in Table 1 of each month's revenue ruling: 5.23% for August 2026 (Rev. Rul. 2026-13), 5.40% for September (Rev. Rul. 2026-17) and 5.54% for October (Rev. Rul. 2026-19), in the column for annual compounding. The notice does not say which of the four compounding columns to use; this calculator reads the annual one because the methods pay once a year, which is our reading, not the IRS's statement. So a first payment in November or December 2026 can use up to 5.54%, one in October 2026 up to 5.40%. Look up the months before your own start on the IRS list, and type the figure in if the calculator does not have it.

Until the later of the fifth anniversary of your first payment and the day you reach 59½ (the date six months after your 59th birthday). The IRS gives two examples for someone born on August 15, 1968, who reaches 59½ on February 15, 2028: if the first payment is on December 1, 2024 the series must run to December 1, 2029 (five years is longer); if it was December 1, 2020 it must run to February 15, 2028 (59½ is longer), even though the fifth annual payment was on December 1, 2024. The calculator works both out, and for your own dates counts the yearly amounts that fall before the end date.

Where a date moves into a shorter month (a birthday on the 31st, a first payment on February 29), the calculator uses the last day of that month; the IRS text does not say, so check a date near the end of a month with your custodian.

Taking a different amount than the method gives (more or less), adding money to the account other than investment gains or losses, moving part of it to another retirement plan, or rolling a payment over (Notice 2022-6, sections 3.01-3.02). Two events are not modifications: you run out of money (the last payment can be smaller) and the one-time change from a fixed method to the RMD method. A change because of death, disability or (for qualified public safety employees) a distribution under section 72(t)(10) is not counted as a modification either.

The cost is the 10% additional tax on everything you took in the year of the change, plus the 10% on all earlier payments in the series, with interest (IRS FAQ question 9). The calculator shows the 10% on the required payments as the amount the exception is worth, so you see what is at stake.

For the RMD and fixed amortization methods you may use the Uniform Lifetime Table (Notice 2022-6, Appendix A), the Single Life Table or the Joint and Last Survivor Table. A longer period means a smaller yearly amount. At age 50 the Single Life Table has 36.2 years, the Joint and Last Survivor Table 40.2 with a beneficiary aged 55 (the notice's own example), and the Uniform Lifetime Table 48.5, so the Single Life Table pays the most of the three here and the Uniform Lifetime Table the least. The joint table needs your real designated beneficiary's age on the account, and may be used with any beneficiary, not only a spouse. The RMD method must keep the table you start with. Fixed annuitization uses the mortality rates in the regulation instead of these tables.

Yes to instalments: you can take the year's amount in annual, quarterly or monthly instalments, as long as the total for the year is right (IRS question 8). A series is set up for one account; you cannot add the balances of several accounts to one series or take the total from one of them. If you have several accounts, each can have its own series, managed separately. For a 401(k) or other employer plan you must have left that employer before the payments start (IRS question 2); the rule does not apply to IRAs.

For the fixed methods, the IRS accepts the balance on any date from December 31 of the year before your first payment up to the date of the first payment (Notice 2022-6, section 3.02(d)). The RMD method uses the balance at the end of the prior year, every year. The fixed amount then does not change with the balance.

Notice 2022-6 replaced Revenue Ruling 2002-62 for series that start in 2023 or later (a series that started in 2022 could use either). The changes that matter: new, longer life expectancy tables (the Uniform Lifetime Table for a 72-year-old went from 25.6 years in Rev. Rul. 2002-62 to 27.4), a new mortality table for the annuity method, and an interest-rate ceiling of the greater of 5% and 120% of the mid-term rate, where the old ceiling was 120% of the rate with no 5% floor. If your series began under the old ruling and uses the RMD method, you can change to the new tables once without it being a modification (IRS question 3).