72(t) Early Withdrawal Calculator
A way to take retirement money before 59½ without the penalty - but it is a one-way door. The lock-in is the later of five years and age 59.5, which catches people out. Start at 50 and you are committed for nine and a half years, not five.
You would be locked in until
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- That is how many years
- -
- Highest method pays
- $0
- Lowest method pays
- $0
- Rate you may use
- 0%
- Why that rate
- -
Where the money goes
The split shows how much of the total is highest method pays and how much is lowest method pays.
Move it and watch
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at {v} for account balance
And what you can change
Why your own figure may differ
The three approved methods
The IRS accepts all three. They pay quite different amounts, and only one of them moves with your account balance.
| Method | Pays each year | Recalculated? |
|---|
72(t) early withdrawals: real examples
Three things people get wrong about 72(t). Click any card to load it.
- The lock-in trap
Starting at 50, not 55
Five years sounds manageable. That is not the rule.
You are committed until 59 and a half - nine and a half years, not five. Starting younger means a far longer commitment.
Load this scenario in the calculator → - Starting later
Starting at 57
The same account, seven years later.
Now the five-year rule is the one that binds, so you finish at 62. The later you start, the shorter the commitment.
Load this scenario in the calculator → - What breaking it costs
Stopping after four years
Taking $30,000 a year, then needing to change.
You owe the penalty on every year taken, not just the last one - plus interest. That is the whole point of the commitment.
Load this scenario in the calculator →
Common questions about 72(t) early withdrawals
What is a 72(t)?
A way of taking money out of a retirement account before 59 and a half without the usual 10% penalty. You commit to taking the same amount every year for a set period. It is a genuine escape hatch, but it is a one-way door - once you start, stopping or changing the amount is expensive.
How long am I locked in for?
Until the later of five years and age 59.5. This is the part people get wrong most often. Start at 50 and you are not committed for five years - you are committed until 59 and a half, which is nine and a half years. The tool works out your actual end date.
What happens if I need to stop?
You owe the 10% penalty on every payment you have taken, not just the year you stopped - plus interest for the years the tax was deferred. Take $30,000 a year for four years and break it, and you owe the penalty on all $120,000. This is why it must be a decision you can live with.
Which of the three methods should I use?
The required minimum distribution method recalculates each year, so your payment moves with the account. The other two fix the amount at the start. Fixed amortization usually pays the most, which suits people who need the income; the RMD method pays less but flexes if markets fall. The tool shows all three so you can see the spread.
What interest rate can I use?
Not whatever you like. The IRS caps it at the greater of 5% or 120% of the federal mid-term rate for one of the two months before your first payment. That rate changes monthly, so we ask you to enter it rather than guess - and the tool applies the cap for you.
Is this a good idea?
It is a last resort with a long tail. It solves a real problem - needing income before 59 and a half - but it drains a retirement account early and locks you in for years. Most people who look into it are better served by other options first. If you do proceed, it is worth paying a professional to check the numbers.