Cash Out Calculator

When you leave a job or encounter unexpected expenses, it may seem tempting to cash out your retirement plan money. However, when you take an early withdrawal from a 401(k), you could lose a significant portion of your retirement money right from the start. Income taxes, a 10% federal penalty tax for early distribution, and state taxes could leave you with barely over half of your original amount, depending on your situation.

Need an alternative to cashing out your 401(k)?

How to Use the 401(k) Cash Out Calculator

This withdrawal calculator can help you decide whether to cash out your 401(k). The estimates are based solely on the information you provide and offers a starting point for your decision-making. Everyone’s personal circumstances are different and there are numerous factors to consider before cashing out a 401(k).

Alternatives to Cashing Out a 401(k)

While cashing out a retirement plan has its disadvantages, leaving money in an old 401(k) retirement plan can make it harder to understand the big picture. Consider rolling your 401(k) into an IRA or a new employer’s retirement plan to stay on track toward your goals, and spare yourself from penalties and taxes on early 401(k) withdrawals.

If you are in need of immediate funds, borrowing from your 401(k) or changing current 401(k) allocations are alternatives worth considering. They may be able to bridge the gap.

Marginal Tax Rate

The highest percentage of tax applied to the last dollar of income, based on the income tax rates set annually by the federal government that are organized into tax brackets. Here is a hypothetical example using 2017 income tax rates in the above table to determine the marginal tax rate for someone with taxable income of $80,000** who is married, filing jointly:

• The marginal tax rate is 25% because the taxable income falls within the $75,900 - $153,100 range.

**Does not include state taxes, local taxes, tax credits, exemptions or deductions. Also does not include qualified dividends or long-term capital gains, which are taxed from 0% - 20%, depending on your tax bracket.

Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide a personal recommendation, fiduciary or investment advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes; other options may be available for your investment. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.