72(t) SEPP Calculators:

The Internal Revenue Code section 72(t) allows for penalty-free withdrawals from deferred retirement accounts under certain rules. Two calculators are provided for your 72t SEPP planning. The first "Distribution Calculator" is used to determine your maximum possible 72t SEPP distribution under the Fixed Amortization Method for a given IRA balance. This calculator also determines a minimum distribution under the Required Minimum Distribution Method, which the IRS allows a one-time switch to. The second "Required Balance Calculator" determines an IRA balance needed to yield a desired annual 72t SEPP distribution. This calculator may be useful if you're targeting a specific annual distribution amount and want to know how much you need in your IRA to meet it.

Distribution Calculator
Required Balance Calculator

How much is my 72t SEPP distribution for a given Traditional IRA balance and age?

$15,000.00

Fixed Amortization Method Distribution:

$5,500.00

Required Minimum Distribution Method (Minimum Amount)
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If I require a 72t SEPP distribution of $ _X_  per year, how much do I need in my Traditional IRA?

$250,000.00

Balance required in your IRA account
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A Note About 72t SEPP Distribution Calculations:

There are no shortage of 72t SEPP Calculators on the internet, and it's always wise to cross-check your results.  That said, understanding which SEPP calculations actually matter will save you time.    IRS Notice 2020-6 allows three methods to calculate substantially equal period payments for 72t SEPP Distributions: The Minimum Method, the Fixed Amortization Method, and the Fixed Annuity Method. These methods all require the use of various IRS-approved life expectancy tables: Single, Joint & Several, and Uniform, which factor into the calculation.   So while there are various ways to calculate a SEPP distribution, only two calculations are important in pratice:

(1) The calculation which yields the largest SEPP distribution, and
(2) the calculation which yields the smallest SEPP distribution

The calculation yielding the largest distribution is the Fixed Amortization Method (Single Life Expectancy Table).   This calculation gives you the largest distribution amount on each dollar dedicated to your 72(t) SEPP plan (about 6 to 7% of your IRA Account depending on your age.)  You should always start your 72(t) SEPP plan with this method regardless of the amount you intend to withdraw.  The Fixed Amortization Method is calculated once and remains unchanged throughout the life of your 72(t) SEPP plan.

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