What annual 72(t) payment does each permitted SEPP method produce?
Compare all three Notice 2022-6 substantially equal periodic payment methods for a new single-account, single-life series. The RMD and fixed amortization methods use the published Single Life expectancy; fixed annuitization discounts survival probabilities from the specified IRS mortality table. An exact first-payment date and birth date determine the later of five years or age 59 1/2.
72t calculator
Quick answer
Compare all three Notice 2022-6 substantially equal periodic payment methods for a new single-account, single-life series. The RMD and fixed amortization methods use the published Single Life expectancy; fixed annuitization discounts survival probabilities from the specified IRS mortality table. An exact first-payment date and birth date determine the later of five years or age 59 1/2.
Also answers
- SEPP calculator
- 72(t) amortization method
- 72t annuitization mortality factor
- substantially equal periodic payments duration
Good fit when
- Comparing three single-life new-series methods
- Checking a proposed interest ceiling
- Understanding continuation dates before early retirement withdrawals
Have ready
- Owner birth date and actual first-payment date
- Single-account initial valuation
- Selected interest rate and qualifying prior-month AFRs if above 5%
- New-series and employer separation confirmations
Result you get
All three annual amounts, installment equivalents, factors, permissible rate and later-of-five-years-or-age-59-1/2 date.
How this calculation works
- Use attained age in the initial distribution calendar year and the published Single Life Table.
- Calculate fixed amortization with annual end-of-year payments and a zero-interest branch.
- Sum annual discounted survival probabilities using the exact published mortality rates through age 120; no interpolated or alternative table.
- Apply the greater-of-5%-or-qualifying-120%-AFR ceiling, with explicit user verification for a higher rate.
- Compute minimum duration using the actual first-payment date and DOB, not a rounded age difference.
- Single Life and mortality tables are established nonindexed rules; no fabricated 2027 AFR is embedded.
Common mistakes and caveats
- Only new single-life, single-account series. Existing modifications, partial transfers, nonqualified annuities and joint-life selections are blocked or outside stated scope.
- A permitted computed payment is not custodian approval or a guarantee of compliance; the initial valuation and distributions must actually follow the chosen method.
- The RMD method's future payment is recomputed annually; fixed-method values are not growth forecasts.
- The 120% AFR inputs are published-rate assertions, not an automatically fetched month-specific rate. No rate above 5% is assumed.
- No income tax, retroactive recapture, withholding, or special distribution exception is computed.
FAQ
What distinguishes the three permitted methods?
The RMD method divides the year's balance by that year's chosen life-table factor and is redetermined annually. Fixed amortization calculates a level annual payment over the initial life-expectancy period at the selected permitted interest rate. Fixed annuitization divides the balance by the present value of payments contingent on survival, using the specified mortality rates rather than substituting the rounded life-expectancy period.
Is 5% the only permissible interest rate?
No. Notice 2022-6 allows any rate no greater than the larger of 5% or a qualifying published 120% federal mid-term rate from either of the two months immediately before the first distribution month. A lower selected rate, including zero, is supported. Rates above 5% require both entered month-specific values and an explicit confirmation that they match the correct published months.
How does the IRS Bob example compare?
For a $400,000 account, attained age 50, Single Life expectancy 36.2 and a 4% rate, the IRS worked example rounds annual payments to about $11,050 for RMD, $21,102 for amortization and $22,030 for annuitization. Its reported amortization and annuity factors are 18.9559 and 18.1568. Production fixtures independently check those published rounded factors and payments.
When can I ordinarily modify or stop the series?
The calculator displays the later of the fifth anniversary of the actual first payment and the owner's age-59-1/2 date. Counting five tax years is not equivalent to the five-year period. Changes before that date can recapture the prior additional tax with interest unless a specific exception applies. Death, disability and other special changes require independent review.
Can I withdraw the annual amount monthly or use multiple accounts?
Monthly installment equivalents are displayed as annual amounts divided by twelve; this does not replace the custodian's payment instructions or first-year administration. Each series belongs to one account. Combining multiple account balances into one SEPP, taking extra withdrawals, or adding contributions can break the series. Separate accounts can have independently administered series, not aggregated withdrawals.
Does this support joint-life tables, existing plans or nonqualified annuities?
No. All three methods are implemented on a single-life basis for a new series beginning after 2022, with attained first-year age 18-59 and an actual payment before age 59 1/2. Existing-plan transitions, joint-life elections and nonqualified annuities are not calculated. Employer-plan scenarios require confirmed separation from service. Ordinary income tax is not eliminated by the exception.
Last updated & sources
Last updated October 13, 2026.
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