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A distribution of retirement savings across different accounts and tax treatments under IRS Rule 72(t).

Formula

Substantially Equal Periodic Payment (SEPP) = Account Balance / Life Expectancy Factor

Guida passo passo

  1. 1Calculate your current retirement account balance
  2. 2Determine your life expectancy factor using IRS tables
  3. 3Divide the balance by the factor to get your annual payment amount
  4. 4Ensure payments are taken for at least 5 years or until age 59.5

Esempi risolti

Ingresso
Balance: $500,000, Life Expectancy: 25 years
Risultato
$20,000 annual SEPP
Allows penalty-free withdrawal before age 59.5

Errori comuni da evitare

  • Not following the 5-year rule
  • Stopping payments prematurely

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