72t Calculator – IRA Distributions Without A Penalty

72(T) Distributions Early IRA Distributions Without A Penalty

Distribution Amount
Gap To
Budget %
Gap To
Budget \$

72 t Calculator Tutorial – Withdrawing From Your IRA Early

Calculator User Inputs – Early Withdrawals

• Account Balance: Enter the balance of your Retirement Accounts (per-taxed accounts such as 401k or IRA account).
• Interest Rate %: The interest rate % should be no greater than 120% of the Federal Mid-Term rate for either of the two months prior to the start of your distributions. As of March 2019, the Federal Mid-Term Rate was at 3.10%, which the IRS has approved.
• Beneficiary Age: You should use the age you will be turning on the year your plan on receiving the distributions.
• Monthly Budget: Enter the amount you expect to spend each month during retirement. Use our online budget calculator to get a better estimate.

Calculator Outputs –

• Section 1 – Defining Distribution Methods:
• Required Minimum Distribution (RMD):
• Fixed Amortization: The interest rate used will be added to this title.
• Section 2 – Distribution Amount:
• We determine the annual figure and a monthly based on single life expectancy (using the IRS life expectancy table).
• These are the series of payments you will take based on the required minimum distribution method and the fixed amortization method for 72 t early distribution.
• The IRA owner should always consult with a tax specialist. Additional amounts taken out can result in an early distribution penalty.
• Section 3 – Gap To Budget %:
• This is calculated by taking the Distribution Amount and dividing it by your expected budget.
• Example: You have a monthly budget set at \$2,000 (\$24,000 annual) and your distribution amount is \$593 a month (\$7,110 annual). You would still need an additional \$1,407 (\$16,890 annual) to cover your expense. 30% of your expense would be cover by the 72t distribution, while the remaining 70% would need to come from another income source.
• Section 4 – Gap To Budget \$:
• This is calculated by taking the 72t distribution amount and subtracting your expected budget.