Substantially equal periodic payments by the RMD, amortization and annuitization methods
Updated October 2026
IRS Notice 2022-6 allows three methods. RMD method: the account balance divided by the life expectancy factor, refigured every year. Fixed amortization: the balance amortized over the life expectancy at a chosen interest rate, the same payment every year. Fixed annuitization: the balance divided by an annuity factor built from the mortality rates in 26 CFR 1.401(a)(9)-9(e) and the interest rate, also fixed.
Worked example. $500,000, age 50, Uniform Lifetime factor 48.5, rate 5.54%. RMD: $500,000 ÷ 48.5 = $10,309. Amortization: $500,000 × 0.0554 ÷ (1 − 1.0554−48.5) = $29,886. Annuitization: $500,000 ÷ 14.8145 = $33,751. Payments here assume one payment at the end of each year, a convention the Notice leaves open. Your plan administrator may use monthly payments or a different timing.
The factor comes from one of three tables: the Uniform Lifetime Table in Appendix A of the Notice (48.5 at 50), the Single Life Table (36.2 at 50) or the Joint and Last Survivor Table, which can be used with any designated beneficiary. Notice 2022-6 gives one example: an owner of 50 whose beneficiaries on January 1 are 25 and 55 uses the Joint and Last Survivor entry for ages 50 and 55, 40.2. The calculator returns 40.2 for those ages.
Interest rate. No more than the greater of 5% or 120% of the federal mid-term rate for either of the two months before the first distribution. The 120% mid-term rates (annual) were 5.40% for September 2026 (Rev. Rul. 2026-17), 5.54% for October (Rev. Rul. 2026-19) and 6.11% for November (Rev. Rul. 2026-21). A series starting in November 2026 can therefore use up to 5.54%, and one starting in December 2026 up to 6.11%.
Duration. Payments must continue until the later of 5 years after the first payment or age 59½. Start at 50 and you are locked in for 9½ years; start at 57 and you must keep going until 62.
Modification. Under IRC 72(t)(4), changing the series early (other than for death or disability) brings back the 10% tax on every payment taken before 59½, plus interest. Adding money to the account other than investment returns, transferring part of it to another plan, or rolling over a payment are all modifications. A one-time switch from amortization or annuitization to the RMD method is allowed. Running out of money because you followed the method is not a modification.
| Situation (rate 5.54%) | Factor | RMD method | Fixed amortization | Fixed annuitization | Must continue until |
|---|---|---|---|---|---|
| Age 50, $500,000, Uniform table | 48.5 | $10,309 | $29,886 | $33,751 | age 59½ |
| Age 50, $500,000, Single Life table | 36.2 | $13,812 | $32,285 | $33,751 | age 59½ |
| Age 50, $500,000, Joint table with a 48-year-old spouse | 43.3 | $11,547 | $30,670 | $31,068 | age 59½ |
| Age 55, $500,000, Uniform table | 43.6 | $11,468 | $30,617 | $35,728 | age 60 |
| Age 45, $500,000, Uniform table | 53.4 | $9,363 | $29,349 | $32,270 | age 59½ |
The Single Life table gives larger payments than the Uniform table because its factor is shorter. Amortization gives the largest fixed payment at a given rate; the RMD method gives the smallest and changes every year with the balance.
Use the balance of the account the payments come from, valued on any date from December 31 of the prior year to the first distribution. Many people split an IRA first so only the needed amount is subject to the plan. Enter your age on your birthday in the first distribution year.
Income tax on the payments (they are taxable as ordinary income), state penalties, monthly payment timing, 72(q) annuity contracts, other 10% exceptions such as separation from service at 55 for 401(k) plans, and the interest charge on a recapture. Because a mistake costs every penalty you avoided, have a tax professional or the plan administrator confirm the first-year figure.
Stopping at 59½ when the 5 years are not up. A 57-year-old must continue to 62. Taking an extra withdrawal from the same IRA for an emergency, which is a modification. Contributing to the SEPP IRA. Using a rate above the cap for the start month. Paying the wrong amount in a year because the custodian’s schedule and the plan’s schedule differ; keep records of every payment.