Compare all three IRS-approved methods to withdraw from your IRA or 401(k) before age 59½ without the 10% penalty.
Must be under 59½ to use 72(t)
Balance in account(s) you'll use for 72(t)
Max allowed: 5.00% (120% of mid-term AFR or 5%, whichever is greater)
Your actual investment return assumption
IRS Table I - Based solely on your age. Most common for 72(t).
Starting at age 52, your SEPP must continue until age 59.5 (8 years). That's the later of 5 years or reaching age 59½. Modifying payments triggers a 10% penalty on all prior distributions.
All three IRS-approved methods side by side
$14,577
$1,215/month
Recalculates annually based on account balance
$30,773
$2,564/month
Fixed payment based on life expectancy & interest rate
$30,773
$2,564/month
Fixed payment using IRS mortality tables
Amortization gives you $16,196/year more than RMD
Using Fixed Amortization method with 6% expected growth
| Year | Age | Start Balance | Withdrawal | Growth | End Balance |
|---|---|---|---|---|---|
| 2026(SEPP) | 52 | $500,000 | -$30,773 | +$28,154 | $497,381 |
| 2027(SEPP) | 53 | $497,381 | -$30,773 | +$27,997 | $494,605 |
| 2028(SEPP) | 54 | $494,605 | -$30,773 | +$27,830 | $491,662 |
| 2029(SEPP) | 55 | $491,662 | -$30,773 | +$27,653 | $488,543 |
| 2030(SEPP) | 56 | $488,543 | -$30,773 | +$27,466 | $485,237 |
| 2031(SEPP) | 57 | $485,237 | -$30,773 | +$27,268 | $481,732 |
| 2032(SEPP) | 58 | $481,732 | -$30,773 | +$27,058 | $478,017 |
| 2033(SEPP) | 59 | $478,017 | -$30,773 | +$26,835 | $474,079 |
| 2034 | 60 | $474,079 | -$30,773 | +$26,598 | $469,905 |
| 2035 | 61 | $469,905 | -$30,773 | +$26,348 | $465,480 |
| 2036 | 62 | $465,480 | -$30,773 | +$26,082 | $460,790 |
| 2037 | 63 | $460,790 | -$30,773 | +$25,801 | $455,818 |
| 2038 | 64 | $455,818 | -$30,773 | +$25,503 | $450,549 |
| 2039 | 65 | $450,549 | -$30,773 | +$25,187 | $444,963 |
| 2040 | 66 | $444,963 | -$30,773 | +$24,851 | $439,041 |
Showing first 15 years of 18 year projection
SEPP Period
8 years
Until age 59.5
Total Withdrawals (SEPP)
$246,181
Over 8 years
Est. Balance at 59½
$474,079
At 6% growth
Divides your account balance by your life expectancy factor each year. Payments vary annually as your balance and age change. Generally produces the lowest initial payment but adjusts over time.
Calculates a level payment like a mortgage, using your balance, life expectancy, and chosen interest rate. Payment stays fixed for the entire SEPP period. Often produces the highest payment.
Divides your balance by an annuity factor from IRS mortality tables. Like amortization, payments are fixed. Usually produces a payment between RMD and amortization.
IRS Section 72(t) allows you to withdraw from retirement accounts before age 59½ without the 10% early withdrawal penalty. You must commit to substantially equal periodic payments (SEPP) for at least 5 years or until age 59½, whichever is longer. This strategy is popular among early retirees and those pursuing FIRE (Financial Independence, Retire Early).
Each method has different characteristics:
Tip: You can make a one-time switch from amortization or annuitization to RMD if your circumstances change.
The IRS allows any rate up to 120% of the federal mid-term applicable rate (AFR) for either of the two months before you start, or 5%, whichever is greater. Higher rates produce higher payments with the amortization and annuitization methods. The current January 2026 120% mid-term AFR is 4.57%, so the effective maximum is 5.0%.
Warning: Modifying your SEPP before the required period ends triggers the 10% penalty retroactively on all prior distributions, plus interest. The only exception is a one-time switch from amortization or annuitization to the RMD method. Death or disability are the only other exceptions. Plan carefully before starting!
Yes! A common strategy is to roll over only the amount you need into a separate IRA, then set up 72(t) on that account. This lets you control your distribution amount by choosing how much to include. Your other retirement accounts grow untouched until you turn 59½.
Both strategies let early retirees access retirement funds penalty-free:
Many early retirees use both strategies together — 72(t) for immediate income while building their Roth ladder.
Determine how much annual income you need from your retirement accounts before age 59½.
Roll the appropriate amount into a dedicated IRA. This controls your payment size.
Select RMD, amortization, or annuitization. Document your calculation method and rate.
Take your calculated amount annually (or monthly). Continue until 5 years pass AND you reach 59½.
72(t) rules are complex and mistakes are costly. Have a CPA or tax advisor review your calculations before starting. Keep detailed documentation of your method, rate, and calculations.
Create separate IRAs for different purposes. One for 72(t), one for emergency reserves, one for long-term growth. This gives you flexibility while protecting your SEPP from accidental modification.
Remember: your SEPP must continue for 5 years OR until 59½, whichever is LONGER. Starting at 50 means 9.5 years of locked payments. Starting at 57 means only 5 years.
If using amortization with a high assumed growth rate, a market crash could deplete your account. Consider being conservative, or use the RMD method which adjusts automatically.
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72(t) is just one strategy. Explore our other calculators to build a complete early retirement plan.