72(t) / SEPP Calculator 2026
Substantially Equal Periodic Payments (SEPP) under IRC § 72(t)(2)(A)(iv) let you access your IRA before age 59½ without the 10% early withdrawal penalty — if you follow the rules precisely. This calculator shows your annual payment under all three IRS-approved methods, the duration your SEPP must run, a year-by-year balance projection, and an IRMAA warning if payments push your Medicare premiums higher.
How to read these results
Which method should you choose?
- RMD method: Lowest payment, recalculated each year. Best if you want to minimize mandatory income (to stay under IRMAA or ACA thresholds) or if you expect high portfolio returns (balance grows, future payments rise automatically). The only method that adjusts if the market drops.
- Fixed Amortization: Highest fixed payment. Best if you need maximum predictable income now and are willing to commit to that exact amount for the SEPP term. Most commonly chosen.
- Fixed Annuitization: Virtually identical to amortization in practice (within 1–3%). Uses an actuarial mortality table from Rev. Rul. 2002-62 rather than the Single Life Expectancy Table. Rarely chosen over amortization because the computation is less transparent and the result is nearly the same.
The one allowable method switch
IRS Notice 2022-6 permits a one-time, one-way switch from Fixed Amortization or Fixed Annuitization to the RMD method — useful if the account value drops significantly and the fixed payment would deplete the account. You cannot switch from RMD to a fixed method.
The immutable SEPP rules
| Rule | What it means | Common trap |
|---|---|---|
| Duration | Longer of 5 years or until age 59½ — whichever ends later | Start at 57, reach 59½ in 2.5 years — but 5-year minimum not met. Must continue to year 5. |
| Equal payments | Fixed method payments must not vary (RMD method recalculates but is built-in) | Taking $4,001 one month instead of $4,000 is a modification. |
| No modifications to the account | No rollovers in, no extra distributions, no plan changes | Rolling a new employer 401(k) into the SEPP IRA triggers retroactive penalty on all prior payments. |
| Account-level (not owner-level) | SEPP applies to a specific IRA, not your aggregate IRA holdings | Confusing this leads people to think all their IRAs are locked — they're not. |
| Retroactive penalty | Any modification triggers 10% penalty on every prior distribution plus interest | Violating in year 4 of a 7-year SEPP reopens all prior years. |
Segmentation: how much IRA balance to dedicate
Because SEPP runs at the account level, you should put only what you need into the SEPP IRA and leave the rest in a separate IRA you can add to freely. Use this tool to find the balance that produces your target income.
SEPP and the rollover IRA context
SEPP becomes critical for job-changers who roll a 401(k) to an IRA before age 59½ — because the Rule of 55 (IRC § 72(t)(2)(A)(v)) disappears at rollover. If you leave a job at 56 and roll to an IRA, you've given up penalty-free access that existed in the employer plan. SEPP is the primary replacement.
The alternative — the Roth conversion ladder — works for people who plan 5 years ahead: convert traditional IRA funds to Roth each year, then access the converted principal tax- and penalty-free 5 years later. SEPP is better when you need income immediately with no 5-year lead time.
Related guides
- SEPP / 72(t) Complete Guide — rules, methods, segmentation strategy, common mistakes
- Roth Conversion Ladder — penalty-free IRA access with 5-year lead time
- Leave 401(k) vs. Roll to IRA — Rule of 55 analysis
- IRA Early Withdrawal Exceptions — all 12 IRC § 72(t)(2) carve-outs
- Roth Conversion Tax Calculator
- Match with a fee-only IRA rollover specialist
Get your SEPP election reviewed
A miscalculated SEPP triggers a retroactive 10% penalty on every prior payment. A fee-only advisor verifies your method, sizes the SEPP IRA, and models the SEPP alongside your Roth conversion plan and IRMAA exposure before your first distribution. Free match, no obligation.
Sources
- IRS Notice 2022-6, Substantially Equal Periodic Payments — 5% safe harbor interest rate floor, permitted methods, one-time switch to RMD method. irs.gov/pub/irs-drop/n-22-06.pdf
- IRC § 72(t)(2)(A)(iv) — statutory basis for the SEPP exception to the 10% early distribution tax. law.cornell.edu/uscode/text/26/72
- IRS T.D. 9930 (November 2020) — updated Single Life Expectancy Table (Table I) effective January 1, 2022. federalregister.gov
- IRS Publication 590-B (2025), Appendix B, Table I — Single Life Expectancy factors used in RMD method calculation. irs.gov/publications/p590b
- Rev. Rul. 2002-62 (as modified by Notice 2022-6) — original SEPP guidance; mortality table for Fixed Annuitization method still derives from Appendix B of this ruling. irs.gov/pub/irs-irbs/irb02-42.pdf
Rate and table values verified June 2026. Maximum interest rate: 5.0% (IRS Notice 2022-6 floor; 120% of mid-term AFR ≈ 4.57–4.63% for Jan–Feb 2026, below the floor). Life expectancy factors from T.D. 9930 Table I as published in IRS Pub 590-B (2025).
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