# 72(t) Distribution Calculator

> A $500,000 IRA at 52 pays $30,773 a year under fixed amortization at 5%. All three IRS methods from Notice 2022-6, with the table, factor and formula shown.

Source: https://savingslast.com/72t-distribution-calculator/
Markdown: https://savingslast.com/72t-distribution-calculator.md
Site: SavingsLast, free retirement drawdown calculators. Educational estimates, not advice.

A $500,000 IRA at 52 pays **$30,773** a year under the fixed amortization method at 5%. The IRS permits 5% whatever the federal mid-term rate is doing. That is $2,564 a month, before federal and state income tax. Enter your balance, age and rate. The calculator shows all three IRS methods, with the table, factor and formula behind each figure.

Rules and tables checked against the IRS sources on September 2, 2026. [Corrections log](https://savingslast.com/corrections/).

*Interactive calculator on the page: https://savingslast.com/72t-distribution-calculator/. The same engine is the MCP tool sepp_72t_payment at https://savingslast.com/mcp.*

## What the three methods pay on the same $500,000

| Method | A year | A month | Later years |
| --- | --- | --- | --- |
| **Fixed amortization** | $30,773 | $2,564 | Same dollar amount every year |
| **Fixed annuitization** | $32,264 | $2,689 | Same dollar amount every year |
| **Required minimum distribution** | $14,577 | $1,215 | Recalculated from the new balance and age |

Balance $500,000. Age 52 on the birthday in the first distribution year. Single Life Table, factor 34.3. Rate 5%, which is permitted in any month, so this example needs no rate month.

Fixed annuitization pays **$1,491** a year more than fixed amortization on these inputs. The RMD method pays less than half of either in year one, and its figure moves every year. Started at 52 and run to 59½, roughly seven and a half years, fixed amortization draws about **$230,794** out of the $500,000.

## The rate is a ceiling, and 5% is always inside it

Notice 2022-6, section 3.02(c), sets a ceiling: the greater of 5% and 120% of the federal mid-term rate. The mid-term figure comes from either of the two months before the month of the first payment. You may use any rate at or below that ceiling. A lower rate chosen to land on a round payment is permitted.

The IRS prints the 120% figure in Table 1 of each month's applicable federal rates ruling. For September 2026 it was **5.40%** (Rev. Rul. 2026-17). On the same $500,000 at 52, a 5.40% rate lifts fixed amortization to $32,322 a year. That is $2,693 a month. A first payment in October or November 2026 may use it. A first payment in September may not, because the rule looks only at the two months before the payment month.

## The lock-in ends on a date, not at an age

The series runs until the later of two dates. Five years after the first payment, or the day you reach 59½. Section 72(t)(4) sets both. Age 59½ is six calendar months after your 59th birthday. That is why the calculator asks for a birth date, not an age, before it prints the end date.

Start at 52 in 2026 and 59½ governs. The series runs into 2033 or 2034. Your birthday decides which. Start at 57 and the five-year period governs, so a first payment in 2026 locks the account until 2031, past your 62nd birthday.

## What counts as breaking the series

This is the part that frightens people, and it should. Change the series before the end date and section 72(t)(4) charges the 10% additional tax on every payment already taken, plus interest. Three years into the $500,000 example that is $92,318 distributed, so $9,232 of penalty, plus the interest.

Notice 2022-6, section 3.02(e), names three modifications that have nothing to do with the payment amount. An addition to the account other than investment gains. A transfer of part of the balance to another retirement account. A rollover of a payment you received. Taking more than the scheduled amount in a year is a modification. Taking less is too.

Three things are not modifications. The RMD method's payment changing each year is the method working as designed. Investment losses are not a modification. If the account runs out while you follow the method, section 3.03(a) says the shortened final payment and the stop are not either. Under section 3.03(b) you may switch once from either fixed method to the RMD method. After that switch, any further change is a modification.

Two things end the series without the retroactive penalty: death, and disability as the code defines it. Section 72(m)(7) counts you as disabled only if you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration. Nothing else ends it. Not a job offer, not a market fall, not a change of mind.

## Split the IRA before the first payment

Divide the IRA into two accounts before anything is distributed. Run the series from one, sized to produce the income you need, and leave the other alone. Money needed later comes from the untouched account with the ordinary 10% additional tax on that withdrawal alone, and the series stays intact. Roth conversions come from the other account too.

The balance you calculate from is a real statement figure. Notice 2022-6, section 3.02(d), accepts the balance on any date from 31 December of the prior year to the first payment date. Take the statement after the split settles and write its date on the worksheet next to the figure.

## What arrives in the bank is less than the figure

Every payment is ordinary income for federal tax and, in most states, for state tax. The [state pages](https://savingslast.com/retirement-taxes-by-state/) show which ones. The custodian withholds federal tax unless you file Form W-4R, and some states withhold too. The figure the method produces is the gross distribution, and the gross is what must match the schedule.

The tax withheld from a scheduled payment is part of that payment. Money taken on top of it, to cover a tax bill, is not. That is a modification, and it costs you the whole series retroactively. If the net is not enough to live on, the answer is a different gross figure at the start, not a top-up later.

The payment also counts toward modified adjusted gross income for marketplace health insurance subsidies, and it is locked for the term. Too large a payment can cost subsidies that taking less will not restore. Too small a payment can, in a state that did not expand Medicaid, leave you below the income where marketplace subsidies begin.

## When 72(t) is the wrong tool

- **You have a 401(k) with the employer you are leaving at 55 or later.** The [rule of 55](https://savingslast.com/rule-of-55-calculator/) has no lock-in, no schedule and no retroactive penalty. Rolling that 401(k) into an IRA gives the rule up for good.
- **You have Roth IRA contributions.** Direct contributions come out with no tax and no penalty at any age.
- **You have taxable brokerage money.** Selling shares costs capital gains tax on the gain only, with no schedule attached.
- **You need money for a year or two.** Five years is the minimum commitment.

From a 401(k) or a similar plan, you must have left that employer first. From an IRA, you do not have to have left anything.

## Five things to settle before the first payment

1. **How you start it.** You file nothing. There is no form, no election and nobody to notify. You take the first payment, and the date of that payment starts the five-year clock.
2. **What you file each year.** Check box 7 of the 1099-R. Code 2 means the custodian has reported the exception and there is nothing more to file. Code 1 is common, and it means you file Form 5329 with exception code 02 every year the series runs.
3. **What you keep.** The balance statement and its date. The calculation with every input: table, factor, rate and the month it came from. The first distribution confirmation. Each year's 1099-R and Form 5329. Keep all of it seven years past the end of the series.
4. **How it ends.** On the later of the two dates above, and not a day earlier. Put that date in a calendar now. No 72(t) is registered with anyone. A code 1 1099-R claimed against Form 5329 is visible, and that is what can draw a notice.
5. **What to do if the custodian's number differs from yours.** You carry the consequence, not the custodian, and their figure is not an approval. Reconcile four things before the first payment: the balance date, the rate month, the table, and single or joint life. If the custodian will not administer the schedule, find one that will before the first payment. Whether an account can move mid-series is a question for a CPA or an enrolled agent who has handled a SEPP, not for a calculator.

## Write three things down and keep the page

Before the first distribution, record the date, the balance with its statement date, and the rate with its month. If the IRS ever asks how you arrived at the number, that page is your answer. Then put the end date in a calendar. That is the first day anything may change.

The ten IRS examples this page is checked against are published on the [test cases page](https://savingslast.com/72t-calculator-test-cases/). Run them through any other calculator before you trust it.

Two questions decide whether to start at all. Does a [401(k) you can leave at 55](https://savingslast.com/rule-of-55-calculator/) or a taxable account cover the gap instead, with no lock-in? And can you live on the after-tax figure for the whole term without touching the series account? A no to the first and a yes to the second is the case for 72(t). Anything else is not.

## Frequently asked questions

**What is a 72(t) distribution?**

A series of substantially equal periodic payments from an IRA or a workplace plan that avoids the 10% additional tax before 59½. The payments are still taxable as ordinary income, federal and in most states. The amount comes from one of three IRS methods set out in Notice 2022-6.

**How much can I take under 72(t)?**

On a $500,000 IRA at 52 with the Single Life Table and a 5% rate, fixed amortization pays $30,773 a year. That is $2,564 a month before tax. The RMD method pays $14,577 in year one. Your balance, age, table and rate change all three figures. Enter them above.

**What interest rate can I use for a 72(t)?**

Any rate up to the greater of 5% and 120% of the federal mid-term rate for either of the two months before the month of your first payment, under Notice 2022-6, section 3.02(c). A lower rate is always permitted and gives a smaller payment.

**How long must a 72(t) series continue?**

Until the later of five years after the first payment and the date you reach 59½. Age 59½ is six calendar months after your 59th birthday. Enter your birth date and first payment date above and the calculator prints the exact end date.

**Can I change or stop a 72(t)?**

Once. You may switch from a fixed method to the RMD method under section 3.03(b), and the series continues at the lower figure. Any other change before the end date brings the 10% additional tax back on every payment already taken, plus interest. The exceptions are death, and disability as section 72(m)(7) defines it.

**Can I take the 72(t) payment monthly?**

The method fixes an annual amount. Paying it in twelve installments is common. What matters is that the total distributed in each year equals the figure the method produced.

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SavingsLast calculators are educational estimates. They assume a constant average return and steady inflation; real markets are volatile and sequence-of-returns risk can shorten how long money lasts. Nothing here is financial, investment, tax, or legal advice. Consult a qualified professional before making decisions.