Clear Money Guide
What this guide covers
A quick view of the questions and evidence developed below.
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Updated July 28, 2026. Quick answer: The ladder is more flexible and cheaper but needs five years of runway before the first dollar is available. 72(t) starts producing income immediately and locks you in for years. Which fits depends almost entirely on how much notice you had.
Side by side
| Roth conversion ladder | 72(t) SEPP | |
|---|---|---|
| First money available | Five years after the first conversion | Immediately |
| Flexibility | High — convert more or less each year | None once running |
| Penalty for changing course | None | Retroactive on everything |
| Needs a bridge | Yes — five years of other money | No |
The deciding question
Did you see this coming? Someone who planned early retirement five years out should build the ladder — it dominates on flexibility and cost. Someone made redundant at 52 with no taxable savings does not have five years, and 72(t) is the tool that works from a standing start.
They combine well. Start a 72(t) sized to cover the next five years from a carved-out account, and simultaneously build a ladder from the untouched remainder. When the ladder matures, the schedule is close to ending anyway.
Get a second opinion before you lock in a schedule
An early-withdrawal schedule commits you for years and is expensive to break, so it is worth having someone check the amount, the account it runs on and the alternatives against the rest of your plan first.
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Check the free option first
If you left work at 55 or later and the money is still in that employer’s plan, the rule of 55 beats both — no lock-in, no lead time.
Sources
IRC §72(t) (10% additional tax and its exceptions); IRC §72(t)(2)(A)(iv) (substantially equal periodic payments); IRC §72(t)(2)(A)(v) (separation from service at 55); Rev. Rul. 2002-62; Notice 2022-6. Cross-checked July 2026 against professional analyses. Interest rates published for these calculations change monthly and are described structurally here rather than quoted.
This states what the cited authority says. It is not tax advice, and a SEPP schedule is unusually unforgiving of small errors.
Related
What the series would actually pay: the SEPP calculator gives the fixed-amortization and RMD-method payments from the regulation’s own life expectancy table, tells you which leg of the lock-in binds for your age, and prices what breaking it would cost — retroactively, across every payment.