Taking money out of a 401(k) before age 59½ usually costs more than people expect: the withdrawal is taxed as income, and most early withdrawals add a 10% additional tax on top.
401(k) Early Withdrawal Calculator
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This calculator shows what you’d actually keep, how much the plan withholds, what you may still owe at tax time and whether one of the IRS exceptions removes the penalty.
How an early withdrawal is taxed
- Income tax: money from a traditional (pre-tax) 401(k), 403(b), TSP or IRA is added to your income for the year, so it’s taxed at your top bracket, and a large withdrawal can push part of it into a higher one.
- 10% additional tax: if you’re under 59½ and no exception applies, the IRS adds 10% of the taxable amount. You report it on Form 5329 with your return.
- State tax: most states tax the withdrawal as income too. A few states have no income tax, and a few add their own early-withdrawal penalty.
- Withholding isn’t the final bill: a 401(k) cash-out has 20% federal tax withheld; IRAs and hardship withdrawals usually withhold 10%. If your real tax plus the penalty is higher, you pay the rest when you file.
When there’s no 10% penalty
You still owe income tax in these cases, but the 10% additional tax doesn’t apply to the qualifying amount:
- You’re 59½ or older.
- You left the employer whose plan you’re withdrawing from in or after the year you turned 55 (50 for qualified public safety workers in a government plan). This works only for that employer’s plan, not an IRA.
- One emergency personal expense withdrawal per year, up to $1,000.
- Birth or adoption, up to $5,000 per child.
- Victims of domestic abuse, up to the lesser of $10,500 (2026) or 50% of the account.
- Federally declared disasters, up to $22,000.
- Unreimbursed medical bills above 7.5% of your adjusted gross income.
- Total and permanent disability, terminal illness (workplace plans), or a series of substantially equal periodic payments.
- IRA only: up to $10,000 for a first-time home purchase, qualified higher education costs, and health insurance premiums while unemployed.
Before you withdraw, compare these options
- A 401(k) loan, if your plan offers one: usually up to the lesser of $50,000 or 50% of your vested balance, repaid through payroll, with no tax or penalty if you stay on schedule. If you leave your job, the unpaid balance may come due.
- A rollover instead of a cash-out when you change jobs. A direct rollover to an IRA or your new plan avoids tax, the penalty and the 20% withholding.
- A personal loan or payment plan. Losing 25% to 40% of a withdrawal to taxes often costs more than a fixed-rate loan. See our personal loan comparison.
- An emergency fund for next time, so one surprise bill doesn’t become a taxable withdrawal. Here’s how to build one.
Frequently asked questions
How much tax will I pay if I cash out my 401(k) early?
Expect your federal tax bracket rate plus 10%, plus any state tax. For a single filer earning $65,000 who withdraws $20,000 at age 40, that’s about $4,250 in federal income tax, a $2,000 additional tax and about $1,000 in state tax at a 5% rate, leaving roughly $12,750.
Why did my plan withhold 20%?
Federal rules require plans to withhold 20% from a distribution that could have been rolled over but is paid to you instead. It’s a prepayment toward your tax, not an extra charge. The 10% additional tax isn’t withheld separately, so many people owe more when they file.
Is a hardship withdrawal penalty-free?
Not automatically. A hardship withdrawal lets you take money out while you’re still working, but the 10% additional tax still applies unless the reason also matches an IRS exception, such as medical bills above 7.5% of AGI or a disaster distribution.
Does this work for a Roth 401(k) or Roth IRA?
No. Roth accounts follow different rules: your Roth IRA contributions can come out at any time without tax or penalty, while earnings may be taxed and penalized if you take them early. This calculator is for traditional, pre-tax money.
Sources: IRS, “Retirement topics: Exceptions to tax on early distributions” and Topic 558; IRS 2026 tax brackets and standard deduction; IRS Notice 2025-67 (2026 retirement plan limits). This tool gives an estimate, not tax advice.
Related: Retirement & 401(k) Calculator, Roth vs. Traditional IRA Calculator, 401(k) vs. Roth IRA, Emergency Fund Calculator.