72(t) SEPP Calculator

A series of substantially equal periodic payments from an IRA or, after leaving a job, a 401(k), taken under IRS Rule 72(t). It lets you access retirement money before 59½ without the usual 10% early-withdrawal penalty — the main legal route to funding an early retirement from tax-advantaged accounts.

For five years or until you reach 59½, whichever is longer. Start at 50 and you are committed until 59½ — nearly a decade. Start at 58 and you must continue until 63, past 59½, because the five-year minimum still applies. There is no early exit without penalty.

Three are allowed: the required minimum distribution method (balance divided by a life-expectancy factor, recomputed yearly, so it varies), fixed amortization (a level payment over life expectancy at an approved rate), and fixed annuitization (using an actuarial factor, landing close to amortization). Amortization usually produces the largest, steadiest payment.

The penalty is severe and retroactive. Modify the payments, take an extra distribution, or contribute to the account before the schedule ends, and the IRS applies the 10% penalty to every SEPP withdrawal you have taken, plus interest. One allowed switch to the RMD method exists, but otherwise the schedule is rigid.

Only when you genuinely need pre-59½ access and have no better source, because the commitment is long and unforgiving. Many early retirees instead bridge with taxable accounts and Roth contributions, which are more flexible, and reserve 72(t) for when those run short. It is powerful but rigid — plan it with an advisor.