Penalty-free early IRA payments by the RMD, amortization and annuitization methods
Estimates only, not financial advice. What you type stays on your device. Checked against sources on 23 Oct 2026.The IRS example for 72(t) payments, $400,000 at age 50 and a 4% rate on the Single Life table, gives $11,050 a year by the RMD method, $21,102 by amortization and $22,030 by annuitization. Enter your balance, date of birth, first payment date, table and rate for your own three payments under Notice 2022-6, and how long they must last.
| First payment in | Maximum rate | RMD method | Fixed amortization | Fixed annuitization |
|---|---|---|---|---|
| October 2026 | 5.40% (Sep 2026, Rev. Rul. 2026-17) | $13,812 | $31,727 | $33,168 |
| November 2026 | 5.54% (Oct 2026, Rev. Rul. 2026-19) | $13,812 | $32,285 | $33,751 |
| December 2026 | 6.11% (Nov 2026, Rev. Rul. 2026-21) | $13,812 | $34,592 | $36,153 |
Rates and rules read from the sources listed on this page (the earliest on 23 Oct 2026); they may have changed since.
Enter the Account balance of the IRA or plan you will draw from, valued no earlier than December 31 of last year.
Set your Date of birth and the date of the First payment.
Choose the Life expectancy table: Single Life, Uniform Lifetime, or Joint and Last Survivor with a beneficiary's age.
Set the Interest rate you choose, no higher than the greater of 5% and the 120% of federal mid-term rate figure.
Compare the yearly payment from each of the three methods and note the Locked in until date; Share result copies a link.
Section 72(t) of the tax code charges a 10% additional tax on most retirement withdrawals before age 59½, but not on a series of substantially equal periodic payments (SEPP) for life. IRS Notice 2022-6 sets the three ways to work out the payment, and this calculator runs all three side by side.
The three methods. The RMD method divides the balance by your life expectancy and is worked out again every year. Fixed amortization spreads the balance evenly over your life expectancy at an interest rate; fixed annuitization divides it by an annuity factor built from the IRS mortality rates. Both fixed methods pay the same amount every year. The IRS's own example, $400,000 at age 50 with 4%, gives $11,050, $21,102 and $22,030, and this page reproduces those figures.
The tables. Single Life and Uniform Lifetime are built in; for Joint and Last Survivor, type your figure from Publication 590-B, Table II.
The interest rate. The cap is the greater of 5% and 120% of the federal mid-term rate for either of the two months before the first payment. The IRS publishes it monthly in a revenue ruling. This page holds the rulings it has read, dated, and the table near the top gives the maximum for each month they cover; for any other month, type the figure from the IRS applicable federal rates page.
The rules in plain words.
What this does not do: pick the method for you, or check that the account qualifies. Not tax advice.
For the calculator's example, $400,000 at age 50 with a 4% rate and the Single Life table, the RMD method gives $11,050 a year (the balance divided by 36.2), amortization $21,102 and annuitization $22,030. Amortization and annuitization fix the payment for the whole period; the RMD amount is worked out again every year from the new balance.
Anyone with an IRA, at any age, and anyone who has left the employer whose 401(k) or other plan holds the money. The payments escape the 10% additional tax on early withdrawals only if they follow one of the three IRS methods and do not change until the lock-in ends, which for the calculator's example is 15 December 2035. Income tax is still due on every payment.
For a first payment in October 2026 the maximum is 5.40%, 120% of the September 2026 federal mid-term rate (Rev. Rul. 2026-17). November 2026: 5.54%, 120% of the October 2026 federal mid-term rate (Rev. Rul. 2026-19). December 2026: 6.11%, 120% of the November 2026 federal mid-term rate (Rev. Rul. 2026-21). IRS figures read on 23 Oct 2026; the cap is never below 5%.
A 72(t) SEPP is a series of substantially equal periodic payments from an IRA or retirement plan, taken at least yearly and figured for your life expectancy. Payments that follow one of the three IRS methods in Notice 2022-6 escape the 10% additional tax on withdrawals before 59½, though income tax still applies.
Fixed annuitization and fixed amortization usually give the largest payments, and the RMD method the smallest. In the IRS example of $400,000 at age 50 and 4%, the yearly amounts are $22,030, $21,102 and $11,050. A higher interest rate raises both fixed methods but not the RMD method.
Notice 2022-6 allows any rate that is not more than the greater of 5% or 120% of the federal mid-term rate for either of the two months before the first payment. The mid-term rate is published monthly by the IRS in its applicable federal rates, so check the current figure before starting.
Payments must continue without change until the later of the fifth anniversary of the first payment and the date you reach 59½. Someone starting at 50 is locked in until 59½; someone starting at 57 is locked in for five full years. The calculator shows the exact date for your inputs.
Modifying the series before the lock-in date brings back the 10% additional tax on every payment taken so far, plus interest, under section 72(t)(4). Death and disability are exceptions. A one-time switch from amortization or annuitization to the RMD method is allowed and is not treated as a modification.
No. For a 401(k) or other employer plan, the IRS says you must have separated from service with that employer before the payments begin. An IRA has no such requirement. If you left the job in or after the year you turned 55, the Rule of 55 may be simpler.
Rates and rules change; check the source before you rely on a figure.
Still stuck? Ask about 72(t) SEPP Calculator and anybody who knows can answer. No account needed.
Also works as: Substantially Equal Periodic Payments Calculator.
Same job, other tools: Rule of 50 Calculator for Public Safety – Penalty-free plan withdrawals for police, firefighters and public safety workers at 50 · Roth Conversion Break-Even Calculator – How many years a Roth conversion needs to pay back the tax you pay on it today · Roth IRA Calculator – Your 2026 Roth IRA limit from income and filing status, and tax-free growth to retirement · Traditional IRA Calculator – How much of a 2026 traditional IRA contribution you can deduct, and its growth after tax.
On the related tools: S Corp Solo 401(k) Calculator – Solo 401(k) maximum for an S corporation owner paid a W-2 salary: 25% of pay plus deferral.
More for US: all 41 US calculators.