Pre-59 "Reasonable" Interest Rates

2002 and Later:

As per Rev. Rul. 2002-62, the following rates are the only allowable rates (i.e., the maximum allowable rates for the relevant dates) for 2003 and later when computing substantially equal periodic payments under 72(t).  They may also be used for 2002 when the ruling is optionally applied for 2002.

120% Mid-Term Applicable Federal Rates:

Year Month Annual Semiannual Quarterly Monthly
2015 Jan 2.10 2.09 2.08 2.08
2014 Dec 2.06 2.05 2.04 2.04
2014 Nov 2.28 2.27 2.26 2.26
2014 Oct 2.22 2.21 2.20 2.20
2014 Sept 2.23 2.22 2.21 2.21
2014 Aug 2.27 2.26 2.25 2.25
2014 July 2.18 2.17 2.16 2.16
2014 June 2.29 2.28 2.27 2.27
2014 May 2.31 2.30 2.29 2.29
2014 Apr 2.17 2.16 2.15 2.15
2014 Mar 2.21 2.20 2.19 2.19
2014 Feb 2.36 2.35 2.34 2.34
2014 Jan 2.10 2.09 2.08 2.08
2013 Dec 1.98 1.97 1.97 1.96
2013 Nov 2.07 2.06 2.05 2.05
2013 Oct 2.31 2.30 2.29 2.29
2013 Sept 1.99 1.98 1.98 1.97
2013 Aug 1.95 1.94 1.94 1.93
2013 July 1.47 1.46 1.46 1.46
2013 June 1.14 1.14 1.14 1.14
2013 May 1.20 1.20 1.20 1.20
2013 Apr 1.31 1.31 1.31 1.31
2013 Mar 1.31 1.31 1.31 1.31
2013 Feb 1.21 1.21 1.21 1.21
2013 Jan 1.04 1.04 1.04 1.04
2012 Dec 1.14 1.14 1.14 1.14
2012 Nov 1.07 1.07 1.07 1.07
2012 Oct 1.12 1.12 1.12 1.12
2012 Sept 1.01 1.01 1.01 1.01
2012 Aug 1.06 1.06 1.06 1.06
2012 July 1.10 1.10 1.10 1.10
2012 June 1.28 1.28 1.28 1.28
2012 May 1.57 1.56 1.56 1.55
2012 Apr 1.38 1.38 1.38 1.38
2012 Mar 1.30 1.30 1.30 1.30
2012 Feb 1.34 1.34 1.34 1.34
2012 Jan 1.40 1.40 1.40 1.40
2011 Dec 1.53 1.52 1.52 1.52
2011 Nov 1.45 1.44 1.44 1.44
2011 Oct 1.44 1.43 1.43 1.43
2011 Sept 1.95 1.94 1.94 1.93
2011 Aug 2.28 2.27 2.26 2.26
2011 July 2.40 2.39 2.38 2.38
2011 June 2.73 2.71 2.70 2.69
2011 May 2.94 2.92 2.91 2.90
2011 Apr 2.98 2.96 2.95 2.94
2011 Mar 2.94 2.92 2.91 2.90
2011 Feb 2.80 2.78 2.77 2.76
2011 Jan 2.34 2.33 2.32 2.32
2010 Dec 1.83 1.82 1.82 1.81
2010 Nov 1.91 1.90 1.90 1.89
2010 Oct 2.07 2.06 2.05 2.05
2010 Sept 2.33 2.32 2.31 2.31
2010 Aug 2.62 2.60 2.59 2.59
2010 July 2.83 2.81 2.80 2.79
2010 June 3.27 3.24 3.23 3.22
2010 May 3.45 3.42 3.41 3.40
2010 Apr 3.25 3.22 3.21 3.20
2010 Mar 3.23 3.20 3.19 3.18
2010 Feb 3.39 3.36 3.35 3.34
2010 Jan 2.95 2.93 2.92 2.91
2009 Dec 3.16 3.14 3.13 3.12
2009 Nov 3.10 3.08 3.07 3.06
2009 Oct 3.20 3.17 3.16 3.15
2009 Sept 3.45 3.42 3.41 3.40
2009 Aug 3.37 3.34 3.33 3.32
2009 July 3.32 3.29 3.28 3.27
2009 June 2.71 2.69 2.68 2.68
2009 May 2.47 2.45 2.44 2.44
2009 Apr 2.59 2.57 2.56 2.56
2009 Mar 2.33 2.32 2.31 2.31
2009 Feb 1.98 1.97 1.97 1.96
2009 Jan 2.48 2.46 2.45 2.45
2008 Dec 3.43 3.40 3.39 3.38
2008 Nov 3.57 3.54 3.52 3.51
2008 Oct 3.81 3.77 3.75 3.74
2008 Sept 4.16 4.12 4.10 4.09
2008 Aug 4.26 4.22 4.20 4.18
2008 July 4.14 4.10 4.08 4.07
2008 June 3.84 3.80 3.78 3.77
2008 May 3.29 3.26 3.25 3.24
2008 Apr 3.45 3.42 3.41 3.40
2008 Mar 3.57 3.54 3.52 3.51
2008 Feb 4.22 4.18 4.16 4.14
2008 Jan 4.31 4.26 4.24 4.22
2007 Dec 4.97 4.91 4.88 4.86
2007 Nov 5.28 5.21 5.18 5.15
2007 Oct 5.23 5.16 5.13 5.11
2007 Sept 5.76 5.68 5.64 5.61
2007 Aug 6.13 6.04 6.00 5.97
2007 July 5.96 5.87 5.83 5.80
2007 June 5.59 5.51 5.47 5.45
2007 May 5.56 5.48 5.44 5.42
2007 Apr 5.54 5.47 5.43 5.41
2007 Mar 5.84 5.76 5.72 5.69
2007 Feb 5.65 5.57 5.53 5.51
2007 Jan 5.51 5.44 5.40 5.38
2006 Dec 5.70 5.62 5.58 5.56
2006 Nov 5.65 5.57 5.53 5.51
2006 Oct 5.79 5.71 5.67 5.64
2006 Sept 6.03 5.94 5.90 5.87
2006 Aug 6.27 6.17 6.12 6.09
2006 July 6.08 5.99 5.95 5.92
2006 June 6.09 6.00 5.96 5.93
2006 May 5.82 5.74 5.70 5.67
2006 Apr 5.68 5.60 5.56 5.54
2006 Mar 5.42 5.35 5.31 5.29
2006 Feb 5.29 5.22 5.19 5.16
2006 Jan 5.39 5.32 5.29 5.26
2005 Dec 5.43 5.36 5.32 5.30
2005 Nov 5.09 5.03 5.00 4.98
2005 Oct 4.91 4.85 4.82 4.80
2005 Sept 5.04 4.98 4.95 4.93
2005 Aug 4.71 4.66 4.63 4.62
2005 July 4.63 4.58 4.55 4.54
2005 June 4.82 4.76 4.73 4.71
2005 May 5.15 5.09 5.06 5.04
2005 Apr 4.92 4.86 4.83 4.81
2005 Mar 4.60 4.55 4.52 4.51
2005 Feb 4.60 4.55 4.52 4.51
2005 Jan 4.53 4.48 4.46 4.44
2004 Dec 4.28 4.24 4.22 4.20
2004 Nov 4.26 4.22 4.20 4.18
2004 Oct 4.36 4.31 4.29 4.27
2004 Sept 4.61 4.56 4.53 4.52
2004 Aug 4.81 4.75 4.72 4.70
2004 July 4.94 4.88 4.85 4.83
2004 June 4.67 4.62 4.59 4.58
2004 May 3.81 3.77 3.75 3.74
2004 Apr 3.80 3.76 3.74 3.73
2004 Mar 4.01 3.97 3.95 3.94
2004 Feb 4.13 4.09 4.07 4.06
2004 Jan 4.23 4.19 4.17 4.15
2003 Dec 4.26 4.22 4.20 4.18
2003 Nov 3.99 3.95 3.93 3.92
2003 Oct 4.39 4.34 4.32 4.30
2003 Sept 4.12 4.08 4.06 4.05
2003 Aug 3.25 3.22 3.21 3.20
2003 July 3.06 3.04 3.03 3.02
2003 Jun 3.68 3.65 3.63 3.62
2003 May 3.82 3.78 3.76 3.75
2003 Apr 3.56 3.53 3.51 3.50
2003 Mar 3.89 3.85 3.83 3.82
2003 Feb 3.93 3.89 3.87 3.86
2003 Jan 4.12 4.08 4.06 4.05
2002 Dec 3.98 3.94 3.92 3.91
2002 Nov 3.68 3.65 3.63 3.62

2002

Oct

4.16 4.12 4.10 4.09
2002 Sep 4.51 4.46 4.44 4.42
2002 Aug 5.10 5.04 5.01 4.99
2002 Jul 5.53 5.46 5.42 5.40
2002 Jun 5.71 5.63 5.59 5.57
2002 May 6.01 5.92 5.88 5.85
2002 Apr 5.60 5.52 5.48 5.46
2002 Mar 5.43 5.36 5.32 5.30
2002 Feb 5.58 5.50 5.46 5.44
2002 Jan 5.40 5.33 5.29 5.27

Link to IRS web page with AFR Revenue Rulings

--------------------------------------------------------------------------------

Pre-2003:

A so-called "reasonable" interest rate is required when using the Amortization or Annuity Factor methods (see IRS Notice 89-25, 1989-1 C.B. 662, Q&A 11 and 12) to compute a pre-59 pension plan distribution that avoids the 10% penalty for early distributions. In various letter rulings, the IRS has accepted use of the 120% Annual Long-Term Applicable Federal Rate for the month in which distributions start. (Some commentators read some of the rulings as saying that you should use 120% of the Annual Long-Term Rate, which is slightly different. However, the difference may be seen as de minimus.) If you judge this rate to be appropriate, it may be used in Brentmark Software's Retirement Plan Analyzer and Retirement Distributions Planner programs for pre-59 distribution calculations. Warning: Letter Rulings cannot be used as binding authority for IRS positions. Since the IRS has not issued any rulings other than Letter Rulings on the topic of "reasonable" interest rates for pre-59 distributions, there is no binding authority on this topic.

Disclaimer: Your use of the following rates must be based solely on your judgment of their applicability. While a reading of Letter Rulings may suggest that this rate is appropriate, Brentmark Software bears no responsibility for any decision by you to use it. This information is provided here only as a service, not as authority for its applicability in your circumstances.

120% Annual Long-Term Applicable Federal Rates:

Jan Feb Mar Apr May June Jul Aug Sep Oct Nov Dec
1997 7.88 8.16 8.26 8.28 8.65 8.57 8.41 8.10 7.89 8.04 7.72 7.59
1998 7.34 7.13 7.12 7.19 7.14 7.25 7.08 6.88 6.91 6.57 6.14 6.32
1999 6.27 6.30 6.38 6.82 6.81 6.97 7.34 7.51 7.53 7.59 7.69 7.79
2000 7.77 8.15 8.13 7.82 7.46 7.69 7.70 7.50 7.33 7.16 7.33 7.19
2001 6.96 6.60 6.71 6.53 6.53 6.92 7.01 6.88 6.70 6.48 6.39 6.08
2002 6.57 6.73 6.60 6.76 7.04 6.85 6.84 6.57 6.29 5.89 5.53 5.91

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Last modified: December 20, 2014