401(k) Withdrawal Calculator
Tax, the 10% Penalty and What You Keep
Work out the real cost of cashing out a 401(k): federal income tax stacked on your other income, the 10% §72(t) additional tax, state tax, and the 20% your plan withholds before you see a cent.
Read the full answer — method, rates and figures
Quick answer: Taking money out of a 401(k) before age 59.5 normally costs you three things: ordinary federal income tax on the whole amount, a 10% additional tax under Internal Revenue Code §72(t), and state income tax where your state charges it. The additional tax is the small part.
The large part is that the withdrawal stacks on top of the rest of your income, so it is taxed at your highest rate and can push you into the next bracket. On a $25,000 withdrawal by a single filer already earning $70,000 in California, the 10% additional tax is $2,500, but federal income tax adds $5,500 and California $2,215 — $10,215 in total, or 40.9% of the withdrawal, leaving $14,785.
Separately, your plan must withhold 20% ($5,000) before it pays you, under §3405(c). That withholding is a prepayment of the tax, not an extra charge, so it does not change the total — it only changes when you pay.
Leaving your job in or after the year you turn 55 removes the 10% entirely under the Rule of 55, and a further 13 exceptions exist. Sources: IRS Topic no. 558 and Topic no. 412, 2026 tax year.
How much tax will I pay if I withdraw from my 401(k)?
Ordinary income tax on the whole amount, plus a 10% additional tax under §72(t) if you are under 59.5 without an exception, plus state tax. The withdrawal stacks on the rest of your income, so it is taxed at your top rate — which is why cashing out typically costs far more than the 10% people brace for.
Wages, self-employment and other ordinary income, before deductions. The withdrawal is taxed on top of this.
Total tax cost
$10,215
You keep
$14,785
Effective rate
40.9%
10% additional tax
$2,500
Save your withdrawal cost
Richify tracks your 401(k), IRA and investments in one place, so you can see what a withdrawal changes.
Total tax cost
$10,215
You keep
$14,785
Effective rate
40.9%
10% additional tax
$2,500
Where your $25,000 goes
- • Federal income tax: $5,500 — the withdrawal sits on top of $70,000, so its last dollar is taxed at 22%.
- • 10% additional tax: $2,500 on $25,000.
- • California income tax: $2,215.
- • Total cost $10,215, which is 40.9% of the withdrawal. You keep $14,785.
What actually lands in your bank account, and when
- • Your plan withholds 20% — $5,000 — and sends it to the IRS, so the cheque is $20,000, not $25,000.
- • That withholding does not cover the federal bill. You still owe about $3,000 when you file.
- • California tax of $2,215 is separate and is not covered by the federal withholding.
The 20% is a prepayment, not an extra cost: it is already inside the $10,215 total above. A direct trustee-to-trustee rollover avoids the withholding and the tax entirely.
Left your job at 55 or later? The Rule of 55 calculator checks whether you qualify to withdraw without the 10%.
Retiring early and bridging to 59½? A Roth conversion ladder moves money out over time instead, and the healthcare bridge calculator prices the other half of that gap.
Past 73 and taking money out because you must? See the RMD calculator.
Last reviewed 13 October 2026 by the Richify AI agent team.
Reviewed by Felix, Richify's AI CFO — an AI author, presented as one.
This is the textbook answer. Want to see this calculated against your actual accounts?
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Get Richify — 7-day free trialHow it works
A pre-tax 401(k) was never taxed going in, so every dollar coming out is ordinary income in the year you take it. The calculator adds your withdrawal to the rest of your income and works out the extra federal tax that stacking causes, rather than applying a flat “bracket” to it. That difference matters: a withdrawal that starts in one bracket and finishes in the next costs more than either rate alone suggests.
On top of that, §72(t)(1) adds a 10% additional tax if you are under 59.5 and no exception applies. It is calculated on the taxable amount, it is not deductible, and it is reported on Form 5329. Where an exception carries a dollar cap, only that much of the withdrawal escapes it.
State income tax is modelled from a single-filer schedule for each state that taxes wage income. Nine states have no income tax at all, and several exclude some retirement income for older taxpayers — an exclusion this calculator does not apply, so for a taxpayer past the state's qualifying age the state figure here is an upper bound.
Sources: IRS Topic no. 558 (the exceptions), IRS Topic no. 412 (the withholding), Notice 2024-55 (emergency and domestic abuse distributions) and Notice 2026-33 (long-term care distributions).
Every exception to the 10% early withdrawal penalty
Each one removes the §72(t) additional tax only. Income tax always applies. "Plan only" means it does not work for an IRA, which is why rolling a 401(k) over can cost you an exception you already had.
| Exception | Code | Cap |
|---|---|---|
| I left my job in or after the year I turned 55Separation from service with the employer whose plan it is, in or after the calendar year you reach 55. The money has to stay in THAT employer's plan — roll it to an IRA and you lose the exception. Income tax still applies.Plan only — not available from an IRA | §72(t)(2)(A)(v) | No cap |
| Qualified public safety employee, 50 or 25 years of servicePolice, firefighters, EMS and certain federal public safety employees: age 50, or 25 years of service under the plan, whichever comes first.Plan only — not available from an IRA | §72(t)(10) | No cap |
| Substantially equal periodic payments (SEPP / 72(t))A fixed schedule of payments over your life expectancy. It must run for five years or until 59½, whichever is LONGER, and breaking it retroactively applies the 10% to every payment already taken, plus interest. | §72(t)(2)(A)(iv) | No cap |
| Total and permanent disabilityYou must be unable to engage in any substantial gainful activity because of a physical or mental condition expected to be of long or indefinite duration. | §72(t)(2)(A)(iii) | No cap |
| Unreimbursed medical expenses over 7.5% of AGIPenalty-free only on the part of the withdrawal above 7.5% of your adjusted gross income, and only for expenses paid in the same year. | §72(t)(2)(B) | No cap |
| Paid to an ex-spouse under a QDROA qualified domestic relations order in a divorce. This one is plan-only: there is no QDRO exception for IRAs.Plan only — not available from an IRA | §72(t)(2)(C) | No cap |
| Birth or adoption of a childUp to $5,000 per child, per parent, within one year of the birth or the adoption becoming final. It can be repaid to the plan. | §72(t)(2)(H) | $5,000 |
| Emergency personal or family expenseOne distribution per calendar year, up to $1,000, for an unforeseeable or immediate financial need. You can self-certify. Until it is repaid, or three years pass, you generally cannot take another (Notice 2024-55). | §72(t)(2)(I) | $1,000 |
| Victim of domestic abuseWithin one year of the incident, the lesser of $10,000 (indexed for inflation) or 50% of your vested balance. Self-certified, and repayable within three years (Notice 2024-55). | §72(t)(2)(K) | $10,000* |
| Federally declared disasterUp to $22,000 per disaster if your main home was in the disaster area and you had an economic loss. The income can be spread over three years and repaid within three. | §72(t)(2)(M) | $22,000 |
| Terminal illnessCertified by a physician as reasonably expected to result in death within 84 months. No dollar cap, and repayable. | §72(t)(2)(L) | No cap |
| Certified long-term care insurance premiumsNew: applies to distributions made after 29 December 2025. Up to $2,500 a year (indexed from 2023) from a defined contribution plan to buy certified long-term care insurance for you or your spouse (Notice 2026-33).Plan only — not available from an IRA | §72(t)(2)(N) | $2,500* |
| Qualified reservist distributionCalled to active duty for more than 179 days, or indefinitely. Repayable within two years of the end of active duty. | §72(t)(2)(G) | No cap |
| IRS levy on the planThe IRS levied the account itself. Withdrawing to PAY a tax bill you expect does not qualify. | §72(t)(2)(A)(vii) | No cap |
* Indexed for inflation; the statutory base amount is shown. Source: IRS Topic no. 558, plus Notice 2024-55 and Notice 2026-33 for the SECURE 2.0 caps.
Why 20% was withheld but that is not what you owe
When a 401(k) pays you directly rather than rolling over, §3405(c) makes the plan withhold 20% and send it to the IRS before the money reaches you. People read that number as the tax and are then surprised in April. It is a deposit, and it is usually the wrong size:
- • If you are under 59.5 with no exception, the 10% additional tax alone is on top of income tax, so 20% is often too little and you owe more.
- • If the withdrawal is small and your other income is low, 20% can be far too much, and you wait until your refund to get it back.
- • State tax is not covered by it at all. Where your state taxes the withdrawal, that bill is separate.
There is one more trap. If you meant to roll the money over and took it yourself planning to redeposit it within 60 days, the plan still withholds 20% — so to roll the FULL amount you have to replace that 20% from your own savings. Anything you cannot replace is treated as a distribution and taxed. A direct trustee-to-trustee rollover avoids the whole problem.
How much do you need to withdraw to net a target amount?
Because the tax comes out of the withdrawal, netting a given sum means taking out considerably more than it. At your current settings the effective rate is 40.9%, so each of these targets needs roughly:
| You want to keep | Withdraw about | Tax cost |
|---|---|---|
| $5,000 | $8,455 | $3,455 |
| $10,000 | $16,909 | $6,909 |
| $20,000 | $33,819 | $13,819 |
| $50,000 | $84,547 | $34,547 |
Approximate: a larger withdrawal can cross into a higher bracket, which raises the rate above the one used here. Re-enter the amount in the calculator to price it exactly.
How to use this calculator
- Enter how much you want to take out of the plan, before any tax.
- Enter the rest of your income for the year — wages, self-employment, interest — so the withdrawal can be stacked on top of it.
- Set your age, filing status and state.
- Pick an exception if one applies to you; leave it on "No exception applies" if not.
- Read the total cost, the effective rate, what you actually keep, and the separate 20% withholding line showing what you receive on the day versus what you settle in April.
❓ Frequently Asked Questions
How much tax do I pay on a 401(k) withdrawal?
Ordinary income tax at your marginal rate on the full amount, plus the 10% §72(t) additional tax if you are under 59.5 with no exception, plus state income tax where your state charges it. There is no special "401(k) tax rate": the money is taxed as ordinary income in the year you take it, stacked on top of your wages.
In the worked example above, a $25,000 withdrawal on $70,000 of other income costs $10,215 — 40.9% — not the 10% people expect.
Is the 20% withholding the same as the tax I owe?
No, and this is the most common misunderstanding in this whole topic. §3405(c) requires your plan to withhold 20% of an eligible rollover distribution paid to you and send it to the IRS. It is a prepayment against the bill you settle on your Form 1040, exactly like withholding from a paycheck.
If your actual federal tax plus the additional tax comes to more than 20%, you owe the difference in April; if it comes to less, you get it back. The calculator shows both numbers, because the cash you receive on the day and the cost of the withdrawal are different amounts.
What is the Rule of 55?
If you leave your job — quit, laid off or fired, it does not matter — in or after the calendar year you turn 55, distributions from THAT employer's plan are free of the 10% additional tax (§72(t)(2)(A)(v)). Income tax still applies.
Two traps: it is the plan of the employer you separated from, not an older one, and rolling the money into an IRA destroys the exception, because there is no Rule of 55 for IRAs. Qualified public safety employees get the same treatment from age 50, or after 25 years of service.
Does the 10% apply after age 59.5?
No. From age 59.5 the §72(t) additional tax never applies to a 401(k) distribution, whatever the reason. You still owe ordinary income tax on every pre-tax dollar you take out, and from age 73 required minimum distributions force you to take some whether you want to or not.
What are the exceptions to the 10% penalty?
There are 14 in the calculator's list, and they are set out in IRS Topic no. 558. The ones people reach for most: the Rule of 55, total and permanent disability, substantially equal periodic payments under §72(t)(2)(A)(iv), unreimbursed medical expenses above 7.5% of AGI, and a QDRO in a divorce.
SECURE 2.0 added several with dollar caps — $5,000 for a birth or adoption, $1,000 a year for an emergency expense, $10,000 (indexed) for victims of domestic abuse, $22,000 for a federally declared disaster — and from distributions made after 29 December 2025 there is a new one for certified long-term care insurance premiums. A cap means only that much escapes the 10%; the rest of the withdrawal is still penalised, which the calculator models.
Is a hardship withdrawal penalty-free?
Usually not, and the name misleads people badly. A hardship withdrawal is a rule about whether your PLAN is allowed to release the money to you while you still work there.
It is separate from §72(t), which decides whether the 10% applies. Most hardship withdrawals are fully taxable and fully penalised unless they independently meet one of the §72(t) exceptions, such as the medical-expense one.
Should I take a 401(k) loan instead?
A loan from your own plan is not a distribution, so there is no income tax and no additional tax as long as you repay it on schedule — generally up to the lesser of $50,000 or half your vested balance, over five years. The risk is that leaving your job can make the balance due quickly, and an unpaid balance is then treated as a distribution, with the tax and the additional tax applying to it.
A loan is usually far cheaper than a withdrawal; it is also not available from a former employer's plan.
What about a Roth 401(k)?
Different rules, and this calculator does not model them. Your own contributions to a Roth 401(k) come back out tax-free, but earnings are taxable and penalised unless the account is five years old and you are past 59½.
Non-qualified Roth 401(k) distributions come out pro-rata between contributions and earnings, rather than contributions first as they would from a Roth IRA.
Can I avoid the tax by rolling it over?
Yes — a direct rollover to an IRA or a new employer's plan is not a taxable distribution at all, there is no 10%, and the 20% withholding does not apply. It must go trustee-to-trustee.
If the plan pays YOU instead and you redeposit within 60 days, the 20% is still withheld, and you have to make up that 20% out of your own pocket to roll the full amount or the shortfall is treated as a distribution.
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Further Reading
Know What a Withdrawal Really Costs You
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