{
  "id": "72t",
  "version": "6914a382f9c1",
  "status": "published",
  "name": "72(t) Calculator",
  "question": "What 72(t) payment can I take?",
  "summary": "Works out the yearly 72(t) substantially equal periodic payment (SEPP) from a retirement account under the RMD, fixed amortization and fixed annuitization methods of IRS Notice 2022-6.",
  "category": "finance",
  "subcategory": "retirement",
  "url": "https://www.acalculator.org/finance/72t-calculator",
  "markdown": "https://www.acalculator.org/finance/72t-calculator.md",
  "kind": "function",
  "method": "RMD: balance ÷ life expectancy. Amortization: balance × i ÷ (1 − (1 + i)^−n), n = life expectancy. Annuitization: balance ÷ Σ v^t × ₜpₓ for t = 0 to 120 − x, with v = 1 ÷ (1 + i) and ₜpₓ the chance of living t more years from the mortality rates.",
  "assumptions": [
    "Life expectancy is read for your age on your birthday in the first distribution year; ages 120 and over use the last row.",
    "Amortization pays at the end of each year over n years (n may be fractional); annuitization pays $1 a year for life from the current age, with nobody living past 120. Notice 2022-6 sets neither timing; these are this page’s conventions.",
    "The Joint and Last Survivor Table is not offered.",
    "This is not tax advice: changing the payments before the later of 5 years or age 59½ brings back the 10% additional tax with interest."
  ],
  "inputs": {
    "$schema": "https://json-schema.org/draft/2020-12/schema",
    "type": "object",
    "properties": {
      "method": {
        "title": "Method",
        "description": "How the payment is worked out: the required minimum distribution method, fixed amortization, or fixed annuitization.",
        "type": "string",
        "enum": [
          "rmd",
          "amortization",
          "annuitization"
        ]
      },
      "bal": {
        "title": "Account balance",
        "description": "The balance on a date from December 31 of last year to the day of the first payment.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 1,
        "maximum": 10000000000
      },
      "age": {
        "title": "Age this year",
        "description": "Your age on your birthday in the year of the first payment (the distribution year).",
        "type": "integer",
        "minimum": 10,
        "maximum": 120
      },
      "table": {
        "title": "Life expectancy table",
        "description": "The Single Life Table or the Uniform Lifetime Table, both allowed by Notice 2022-6.",
        "type": "string",
        "enum": [
          "single",
          "uniform"
        ]
      },
      "rate": {
        "title": "Interest rate",
        "description": "The rate you choose: at most 5%, or 120% of the federal mid-term rate if that is higher.",
        "type": "number",
        "x-unit": "percent",
        "minimum": 0,
        "maximum": 100
      },
      "afr": {
        "title": "Federal mid-term rate",
        "description": "Optional: the federal mid-term rate (annual) for either of the two months before the first payment, from the IRS rate tables.",
        "type": "number",
        "x-unit": "percent",
        "minimum": 0,
        "maximum": 50
      }
    }
  },
  "outputs": {
    "annual": {
      "label": "Yearly payment",
      "description": "The 72(t) payment for the first distribution year.",
      "format": "money"
    },
    "monthly": {
      "label": "Monthly equivalent",
      "description": "The yearly payment ÷ 12, if you take it monthly.",
      "format": "money"
    },
    "factor": {
      "label": "Divisor used",
      "description": "The life expectancy (RMD), the years of amortization, or the annuity factor (annuitization).",
      "format": "number"
    },
    "maxRate": {
      "label": "Highest rate allowed",
      "description": "The greater of 5% and 120% of the federal mid-term rate you typed.",
      "format": "percent"
    },
    "redo": {
      "label": "Later years",
      "description": "Whether the payment stays fixed or is worked out again each year.",
      "format": "text"
    }
  },
  "defaultAnswer": {
    "inputs": {
      "method": "amortization",
      "bal": 500000,
      "age": 50,
      "table": "single",
      "rate": 5
    },
    "outputs": {
      "annual": 30156.117425445136,
      "monthly": 2513.009785453761,
      "factor": 36.2,
      "redo": "Fixed: the same payment every year (one switch to the RMD method is allowed)."
    },
    "text": "Under the Amortization method, a balance of $500,000.00 at age 50 allows a 72(t) payment of $30,156.12 a year."
  },
  "examples": [
    {
      "given": {
        "method": "rmd",
        "bal": 500000,
        "age": 50,
        "table": "single"
      },
      "expect": {
        "annual": 13812.154696132595,
        "factor": 36.2
      },
      "source": "hand calculation in content.mdx: 500,000 ÷ 36.2 = $13,812.15; IRS Notice 2022-6, Determination of substantially equal periodic payments, Internal Revenue Bulletin 2022-5 (§3.01 the three methods; §3.02 the tables, the interest rate and the mortality rates). https://www.irs.gov/irb/2022-05_IRB#NOT-2022-6, retrieved 2026-10-02; Treas. Reg. §1.401(a)(9)-9 (b) Single Life Table and (e) mortality rates, Cornell LII copy. https://www.law.cornell.edu/cfr/text/26/1.401(a)(9)-9, retrieved 2026-10-02"
    },
    {
      "given": {
        "method": "rmd",
        "bal": 500000,
        "age": 50,
        "table": "uniform"
      },
      "expect": {
        "annual": 10309.278350515464,
        "factor": 48.5
      },
      "source": "hand calculation in content.mdx: 500,000 ÷ 48.5 = $10,309.28 (Uniform Lifetime Table, Notice 2022-6 Appendix A); IRS Notice 2022-6, Determination of substantially equal periodic payments, Internal Revenue Bulletin 2022-5 (§3.01 the three methods; §3.02 the tables, the interest rate and the mortality rates). https://www.irs.gov/irb/2022-05_IRB#NOT-2022-6, retrieved 2026-10-02"
    },
    {
      "given": {
        "method": "amortization",
        "bal": 500000,
        "age": 50,
        "table": "single",
        "rate": 5
      },
      "expect": {
        "annual": 30156.11742544513,
        "factor": 36.2
      },
      "source": "hand calculation in content.mdx: 500,000 × 0.05 ÷ (1 − 1.05^−36.2) = $30,156.12; IRS Notice 2022-6, Determination of substantially equal periodic payments, Internal Revenue Bulletin 2022-5 (§3.01 the three methods; §3.02 the tables, the interest rate and the mortality rates). https://www.irs.gov/irb/2022-05_IRB#NOT-2022-6, retrieved 2026-10-02; IRS, Substantially equal periodic payments (payments continue for the later of 5 years or age 59½; rate at most the greater of 5% or 120% of the federal mid-term rate). https://www.irs.gov/retirement-plans/substantially-equal-periodic-payments, retrieved 2026-10-02"
    },
    {
      "given": {
        "method": "annuitization",
        "bal": 500000,
        "age": 50,
        "rate": 5
      },
      "expect": {
        "annual": 29653.392836151987,
        "factor": 16.86147695687706
      },
      "source": "hand calculation in content.mdx (Python 3 from the mortality rates): annuity factor 16.86148, 500,000 ÷ 16.86148 = $29,653.39; IRS Notice 2022-6, Determination of substantially equal periodic payments, Internal Revenue Bulletin 2022-5 (§3.01 the three methods; §3.02 the tables, the interest rate and the mortality rates). https://www.irs.gov/irb/2022-05_IRB#NOT-2022-6, retrieved 2026-10-02; Treas. Reg. §1.401(a)(9)-9 (b) Single Life Table and (e) mortality rates, Cornell LII copy. https://www.law.cornell.edu/cfr/text/26/1.401(a)(9)-9, retrieved 2026-10-02"
    },
    {
      "given": {
        "method": "amortization",
        "bal": 400000,
        "age": 55,
        "table": "single",
        "rate": 5.5,
        "afr": 4.6
      },
      "expect": {
        "maxRate": 5.52
      },
      "source": "hand calculation in content.mdx: 120% × 4.6% = 5.52%, more than 5%, so 5.5% is allowed; IRS, Substantially equal periodic payments (payments continue for the later of 5 years or age 59½; rate at most the greater of 5% or 120% of the federal mid-term rate). https://www.irs.gov/retirement-plans/substantially-equal-periodic-payments, retrieved 2026-10-02"
    }
  ],
  "sources": [
    "IRS Notice 2022-6, Determination of substantially equal periodic payments, Internal Revenue Bulletin 2022-5 (§3.01 the required minimum distribution, fixed amortization and fixed annuitization methods; §3.02 the Single Life, Uniform Lifetime and Joint and Last Survivor tables, the interest rate limit, the mortality rates of §1.401(a)(9)-9(e), and the account balance; §3.03 the one-time switch to the RMD method; Appendix A Uniform Lifetime Table from age 10). https://www.irs.gov/irb/2022-05_IRB#NOT-2022-6 (retrieved 2026-10-02)",
    "IRS, Substantially equal periodic payments: payments continue for the later of 5 years or age 59½; the rate may be at most the greater of 5% or 120% of the federal mid-term rate; a modification brings the 10% additional tax and a recapture tax with interest. https://www.irs.gov/retirement-plans/substantially-equal-periodic-payments (retrieved 2026-10-02)",
    "Treas. Reg. §1.401(a)(9)-9, Life expectancy and distribution period tables: (b) Single Life Table and (e) mortality rates (Cornell Legal Information Institute copy; the Single Life Table matches IRS Publication 590-B Appendix B, Table I). https://www.law.cornell.edu/cfr/text/26/1.401(a)(9)-9 (retrieved 2026-10-02)"
  ],
  "related": [
    "401k-early-withdrawal",
    "rmd",
    "retirement-withdrawal",
    "ira"
  ],
  "changelog": []
}