Substantially equal periodic payments
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Definition
A series of distributions under Section 72(t)(2)(A)(iv) avoiding the ten percent penalty, computed under one of three approved methods.
Substantially equal periodic payments in plain English
A 52-year-old needs IRA cash without eating the 10% early-distribution penalty, and a one-time withdrawal will not qualify. Substantially equal periodic payments under Section 72(t)(2)(A)(iv) avoid that penalty when computed under one of three approved methods and continued for the required period. Modifying the schedule too early usually triggers recapture. Treat SEPP as a rigid series, not a flexible ATM. Once you start, plan to keep the method intact until age 59.5 and for at least five years.
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