401(k) Early Withdrawal Calculator
See exactly how much you will lose to the 10% penalty, federal taxes, and state taxes when cashing out your 401(k) before age 59½.
401(k) Early Withdrawal Calculator
See the true cost of cashing out early
Withdrawal Breakdown
You lose $18,500 to keep $31,500
Opportunity Cost
If you left this $50,000 invested at 7% annual return, it would grow to $193,484 by age 65.
That is $143,484 in lost growth over 20 years.
Consider These Penalty-Free Alternatives
- 401(k) Loan: Borrow up to 50% (max $50,000) and repay yourself
- Rule of 55: Leave your job at 55+ to access funds penalty-free
- 72(t) SEPP: Take substantially equal periodic payments at any age
- Roth IRA: Contributions (not earnings) can be withdrawn anytime
This calculator provides estimates only. Actual taxes depend on your total income and deductions. Consult a tax professional before making withdrawal decisions. State tax rates vary; some states have no income tax. Additional local taxes may apply.
What You Need to Know About Early 401(k) Withdrawals
10% Penalty
The IRS charges a 10% early withdrawal penalty on 401(k) distributions taken before age 59½. This is on top of regular income taxes.
Income Taxes
Traditional 401(k) withdrawals are taxed as ordinary income at your federal rate (10-37%) plus state taxes (0-13% depending on state).
Lost Growth
Beyond taxes, you lose years of compound growth. $50,000 withdrawn at 45 could have grown to $200,000+ by age 65.
Example: Cashing Out $50,000 at Age 45
| Item | Amount |
|---|---|
| Withdrawal Amount | $50,000 |
| 10% Early Withdrawal Penalty | -$5,000 |
| Federal Income Tax (22% bracket) | -$11,000 |
| State Income Tax (5% average) | -$2,500 |
| You Actually Receive | $31,500 |
In this example, you lose 37% of your withdrawal to penalties and taxes. The exact amount depends on your tax bracket and state.
Exceptions to the 10% Early Withdrawal Penalty
Including new SECURE 2.0 Act provisions effective 2024-2026
NEW 2024-2026SECURE 2.0 Act Exceptions
Up to $1,000/year for unforeseeable needs
Up to $22,000 for federally declared disasters
Up to $10,000 (or 50% vested) for victims
Unlimited if physician-certified terminal
Standard IRS Exceptions
No penalty after reaching 59½
Leave job at 55+ (50 for public safety)
Substantially equal periodic payments
Permanent disability as defined by IRS
Beneficiaries can withdraw penalty-free
Unreimbursed expenses exceeding 7.5% of AGI
Called to active duty for 180+ days
Up to $5,000 within one year
Important Note
These exceptions only waive the 10% early withdrawal penalty. You still owe regular income taxes on all traditional 401(k) withdrawals regardless of age or exception.
Better Alternatives to Cashing Out
401(k) Loan
Borrow up to 50% of your vested balance (max $50,000) and repay yourself over 5 years. No taxes or penalties if repaid on time. Caution: loan becomes due if you leave your job.
Wait for Rule of 55
If you are close to 55, waiting until you leave your job at 55+ allows penalty-free access. Use our Rule of 55 Calculator to plan.
72(t) SEPP Payments
Take substantially equal periodic payments from your IRA at any age without penalty. Use our 72(t) SEPP Calculator to calculate your payments.
Roth IRA Contributions
If you have a Roth IRA, you can withdraw your contributions (not earnings) at any time without taxes or penalties. Consider building a Roth for future flexibility.
Frequently Asked Questions
What is the penalty for early 401(k) withdrawal?
If you withdraw from your 401(k) before age 59½, you typically owe a 10% early withdrawal penalty on top of regular income taxes. For example, withdrawing $50,000 would cost $5,000 in penalties alone, plus $11,000+ in federal taxes (22% bracket) and state taxes.
How much tax will I pay on a 401(k) withdrawal?
Traditional 401(k) withdrawals are taxed as ordinary income. The amount depends on your tax bracket (10% to 37% federal) plus state taxes (0% to 13.3% in California). Combined with the 10% penalty if under 59½, you could lose 30-50% of your withdrawal. A $50k withdrawal typically nets $31,500.
What are the new SECURE 2.0 penalty-free exceptions?
The SECURE 2.0 Act (2024-2026) added new penalty-free withdrawal options: up to $1,000/year for emergency expenses, up to $22,000 for federally declared disasters, up to $10,000 for domestic abuse victims, and unlimited for terminal illness. These avoid the 10% penalty but still owe income tax.
What is the $1,000 emergency withdrawal rule?
Starting in 2024 under SECURE 2.0, you can withdraw up to $1,000 per year for unforeseeable emergency expenses without the 10% penalty. You have 3 years to repay it. If you don't repay, you can't take another emergency withdrawal until you do or 3 years pass.
What is the Rule of 55 for 401(k) withdrawals?
The Rule of 55 allows you to withdraw from your current employer's 401(k) penalty-free if you leave your job during or after the year you turn 55 (50 for public safety employees). Key limitation: only applies to your current employer's plan, not old 401(k)s or IRAs.
Why does my employer withhold 20% but I owe more?
The mandatory 20% federal withholding is just a prepayment, not your actual tax. If your marginal rate is 22% + 10% penalty + 5% state tax = 37% total, you'll owe an additional 17% at tax time. Conversely, if you're in the 12% bracket, you might get some back.
How long does a 401(k) withdrawal take?
Typically 3-10 business days after approval. Hardship withdrawals may take longer (1-2 weeks) due to documentation review. Timeline: submit request → plan administrator reviews → funds released → direct deposit or check mailed. Expedited processing is rarely available.
Is a 401(k) loan better than a withdrawal?
Usually yes. With a 401(k) loan, you borrow up to 50% of your balance (max $50,000) and repay yourself with interest over 5 years. Cost comparison: $50k loan costs ~$5k in interest paid to yourself. $50k withdrawal costs $18,500 in taxes/penalties paid to the government.
Should I cash out my 401(k) to pay off credit card debt?
Do the math first. If your credit card APR is 25% and you'd lose 37% to taxes/penalties on withdrawal, cashing out costs more. However, if you're in a low tax bracket (12%) with no state tax, the effective cost is 22%—lower than some credit cards. Each situation differs.
What counts as a 401(k) hardship withdrawal?
IRS-approved hardships include: medical expenses, costs to prevent eviction, funeral expenses, home purchase (primary residence), tuition for next 12 months, and home repairs from casualty. Important: hardships avoid plan restrictions but do NOT avoid the 10% penalty or taxes.
Regulatory Sources
Calculator logic based on IRS regulations for early 401(k) distributions, including IRC Section 72(t) penalties and the SECURE 2.0 Act of 2022 provisions effective through 2026.
- • IRS Publication 575: Pension and Annuity Income
- • IRC Section 72(t): Early Distribution Penalty
- • SECURE 2.0 Act (Pub. L. 117-328, Dec. 2022)
- • IRS Notice 2024-XX: Emergency Expense Distributions
- • 2026 Federal Income Tax Brackets (IRS Rev. Proc.)
Calculator Transparency
- ✓No email required to use calculator
- ✓All calculations performed client-side (your data stays private)
- ✓Uses 2026 federal tax brackets and state tax rates
- ✓Updated for SECURE 2.0 Act penalty-free exceptions
Last updated: January 2026 • Includes SECURE 2.0 provisions effective through 2026
Not financial advice. This calculator is for educational purposes only and does not constitute financial, tax, or investment advice. Results are estimates based on the inputs you provide and historical data. Consult a qualified financial advisor for personalized guidance. Read our editorial guidelines.
This calculator provides estimates for educational purposes only. Actual taxes and penalties depend on your specific situation, total income, deductions, and state of residence. Always consult a qualified tax professional or financial advisor before making withdrawal decisions. 401(k) plans may have additional restrictions on withdrawals. This is not tax advice.