amortization method
Definition 1
A distribution calculation method for making penalty-free early withdrawals from retirement accounts. An assumed earnings rate is applied over the duration of the individual's life expectancy, while the life expectancy is determined using IRS tables. Generally, the rate must be within 120% of the applicable federal long-term rate. Once the rate is determined, the withdrawal remains fixed each year.
Definition 2
A distribution calculation method for making penalty-free early withdrawals from retirement accounts. An assumed earnings rate is applied over the duration of the individual's life expectancy. Generally, the rate must be within 120% of the applicable federal long-term rate. Once the rate is determined, the withdrawal remains fixed each year.
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Related Terms
annuity factor method, recalculation method, term certain method
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