72(t) Distribution Calculator
Rule 72(t) is the way to reach IRA money before 59½ without the 10% penalty: a series of substantially equal periodic payments that you commit to for five years or until 59½, whichever is longer. The commitment is the catch.
The three IRS methods
| Method | How the payment is set | Payment size |
|---|---|---|
| Required minimum distribution | Balance ÷ life expectancy factor, recalculated annually | Smallest, and it varies each year |
| Fixed amortization | Balance amortised over life expectancy at a chosen interest rate | Largest, fixed for the whole term |
| Fixed annuitization | Balance ÷ an annuity factor from IRS mortality tables | Similar to amortization, fixed |
Under IRS Notice 2022-6 the interest rate used for the two fixed methods may be up to the greater of 5% or 120% of the federal mid-term rate — a meaningful increase on the older rules, and it raises the payment you can take. You may switch once from either fixed method to the RMD method without breaking the series; that is the standard escape valve if markets fall.
The lock-in — read this twice
The series must continue for five years or until age 59½, whichever is longer. Start at 52 and you are committed until 59½ — seven and a half years. Start at 57 and you are committed until 62.
Modify the payments, add to the account, or take an extra withdrawal, and the IRS applies the 10% penalty retroactively to every distribution in the series, plus interest. This is not a warning, it is the actual mechanism, and it is why 72(t) should never be applied to your whole IRA.
The standard defence: split the IRA first
Divide the IRA into two accounts. Apply the 72(t) series to one, sized to produce exactly the income you need, and leave the other untouched. If you later need extra money, take it from the untouched account and pay the ordinary 10% penalty on that withdrawal alone — rather than blowing up the whole series retroactively.
How the calculator works
Each month the balance earns one month of return, then the withdrawal is taken out. Every 12 months the withdrawal is increased by the inflation rate so your spending power stays level. If you enter a tax rate, each withdrawal is grossed up so the after-tax amount you keep matches the number you typed. The calculator stops when the balance hits zero, or after 100 years if it never does.
The "to last 20 / 25 / 30 years" figures are solved by bisection: the largest starting withdrawal that still survives that horizon under the same return and inflation assumptions.
When 72(t) is the wrong tool
- You have a qualifying 401(k). The rule of 55 is strictly better: no lock-in, no schedule, no retroactive penalty.
- You have Roth contributions. Direct Roth IRA contributions come out tax and penalty free at any age.
- You have taxable brokerage money. Selling shares costs capital gains tax, usually far less than committing to a rigid schedule for years.
- You only need money for a year or two. The minimum five-year commitment makes short bridges uneconomic.
The calculator above models the payment as a level withdrawal with inflation set to zero, because a 72(t) payment does not rise with inflation under the fixed methods — which is itself a real cost over a long series.
Frequently asked questions
What is a 72(t) distribution?
A series of substantially equal periodic payments from an IRA or, less commonly, a workplace plan, which avoids the 10% early-withdrawal penalty before 59½. It is defined in section 72(t) of the tax code and must follow one of three IRS-approved calculation methods.
How long must a 72(t) series continue?
Five years or until you reach 59½, whichever is longer. Breaking it early triggers the 10% penalty retroactively on every payment already taken, plus interest.
Can I stop a 72(t) if my circumstances change?
Not without the retroactive penalty, except on death or disability. You may make a one-time switch from a fixed method to the RMD method, which lowers the payment — that is the only relief built into the rules.
How much can I take under 72(t)?
It depends on your balance, age and the method. On a $500,000 IRA at 52 the fixed amortization method typically produces somewhere near $19,000–24,000 a year at current permitted interest rates. The RMD method produces less and varies annually.
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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.