Retirement Plan Early Distribution

What Would Remain After Taxes and Penalties?

The amount withdrawn layered on top of other taxable income may move you into a higher tax bracket.

If you take an early distribution from your tax-deferred account, how much will you have remaining after paying income taxes and penalties?

The tax-deferred account may be a 401(k) plan, your individual retirement account (IRA), profit sharing plan, or other tax-deferred savings account.

Generally, if you withdraw funds from a tax-deferred retirement account and have not reached age 59 1/2, your withdrawal will be subject to a 10% penalty on the amount withdrawn. In addition to paying income taxes at the federal level, you may have to pay state taxes. There may also be a state penalty on an early withdrawal. State taxes are not considered in this example.

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Your Results
Description Amount
Your federal income tax rate after making the withdrawal: 0%
The amount you plan to withdraw from your tax-deferred account: $0
The estimated taxes due on the amount withdrawn: $0
The 10% penalty on the amount withdrawn: $0
The estimated total taxes and penalties: $0
The amount remaining after taxes and penalties: $0

Whenever possible, it's generally best to avoid paying early withdrawal penalties on retirement assets. How much of your retirement nest egg would be lost to taxes and penalties if you took an early withdrawal? Note that this example assumes that the account is funded with pre-tax or tax-deductible contributions, and that withdrawn amounts are taxable.

Total taxes and penalties are estimated to be $0.00. After taxes and penalties, the amount remaining will be $0.00.

There are certain exceptions to the penalty imposed on an early withdrawal. However, income taxes must still be paid. Consult your tax advisor before taking any action.

Distribution Potentially Lost to Penalties and Taxes