# SEP IRA Withdrawal Calculator > How long a SEP IRA lasts in retirement, plus the distribution rules for the self-employed: 59½, required distributions at 73, and the tax on every withdrawal. Source: https://savingslast.com/sep-ira-withdrawal-calculator/ Markdown: https://savingslast.com/sep-ira-withdrawal-calculator.md Site: SavingsLast, free retirement drawdown calculators. Educational estimates, not advice. A SEP IRA is the self-employed retirement account with the highest contribution ceiling — and on the way out, it behaves exactly like a traditional IRA. Enter your balance to see how long it supports the income you need. *Interactive calculator on the page: https://savingslast.com/sep-ira-withdrawal-calculator/. The same engine is the MCP tool how_long_will_money_last at https://savingslast.com/mcp.* ## Distribution rules in one place - **Withdrawals are ordinary income.** Contributions were deducted, so tax is due on the way out — enter your expected rate above. - **10% penalty before 59½**, unless an exception applies. The [rule of 55](https://savingslast.com/rule-of-55-calculator/) does *not* apply, because a SEP is an IRA. The route to early money is a [72(t) series](https://savingslast.com/72t-distribution-calculator/). - **Required minimum distributions from 73** (75 for those born in 1960 or later), calculated on the prior 31 December balance. - **No loan provision.** Unlike a 401(k), you cannot borrow from a SEP IRA. - **Roth SEP contributions became possible under SECURE 2.0**, so some SEP balances may now hold Roth money with different rules — check with your provider. ## The self-employed retiree's specific problem SEP IRA holders are usually business owners, which means three things a salaried retiree does not face: income that stops abruptly rather than at a chosen date, no employer retiree health coverage, and often a business sale that lands as a large taxable event in a single year. The last one matters most — a sale year is a terrible year to also take large SEP withdrawals, and a superb year to take almost none. ## How the calculator works Each month the balance earns one month of return, then the withdrawal is taken out. The withdrawal itself rises a little every month, at the rate that compounds to your inflation figure over a full year, 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. ## The gap years are worth planning Between retiring and 73 there is usually a window with no salary, no Social Security if you delay it, and no required distributions. That is the cheapest tax window you will get. Taking SEP withdrawals or converting to Roth in those years shrinks the balance that will later be forced out at 73, when it stacks on top of Social Security and can push Medicare premiums up through the IRMAA thresholds. ## Consolidation is usually worth it Many self-employed people accumulate a SEP, a solo 401(k) from a different year, and one or two IRAs from old jobs. Required distributions are calculated per account type with different aggregation rules, and it is easy to miss one — the penalty for a missed distribution is 25%, reduced to 10% if corrected promptly. Consolidating to a single IRA before 73 removes the risk entirely. ## Choosing realistic inputs - **Annual return.** 4–5% is a conservative planning number for a balanced portfolio; 6–7% is closer to long-run history for 60/40; cash and CDs are 3–5% today but fall when rates fall. - **Inflation.** The Federal Reserve targets 2%; the 30-year U.S. average is about 2.5%. Healthcare inflation runs higher, so retirees with large medical costs should test 3–3.5%. - **Withdrawal.** Enter what you actually spend. Put Social Security and any pension in their own boxes, and the calculator takes them off your spending. Social Security counts from the starting age you enter. With those boxes at 0, enter only the gap that savings must cover. ## Frequently asked questions **How are SEP IRA withdrawals taxed?** As ordinary income, at your marginal rate in the year you take them. Contributions were tax-deductible when made, so the tax is deferred rather than avoided. There is no capital gains treatment regardless of how the money was invested. **Can I withdraw from a SEP IRA before 59½?** Yes, but with a 10% penalty on top of income tax unless an exception applies. The rule of 55 does not cover SEP IRAs because they are IRAs, not workplace plans — a 72(t) series is the usual route to penalty-free early access. **When do SEP IRA required distributions start?** Age 73 for people who reached 72 after 2022, and 75 for those born in 1960 or later. The first distribution may be deferred to 1 April of the following year, but that doubles up two distributions in one tax year. **Can I still contribute to a SEP IRA after retiring?** Only if you still have self-employment income. SEP contributions come from the business, so once the business income stops, contributions stop — even though you may continue contributing to a regular IRA if you have any earned income. ## Related calculators - [Money last in retirement](https://savingslast.com/how-long-will-my-money-last-in-retirement/) - [Retirement savings lifespan](https://savingslast.com/how-long-will-my-retirement-savings-last/) - [How long savings last](https://savingslast.com/how-long-will-my-savings-last/) - [Retirement withdrawal calculator](https://savingslast.com/retirement-withdrawal-calculator/) - [Retirement drawdown calculator](https://savingslast.com/retirement-drawdown-calculator/) - [Savings withdrawal calculator](https://savingslast.com/savings-withdrawal-calculator/) 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.