Early 401(k) Withdrawal Cost Calculator
The form asks "how much do you want?" Nobody tells you what you keep, and what you quietly destroy.
Penalty exceptions exist (medical >7.5% of income, higher education, first-time home ≤$10k, birth/adoption ≤$5k, disability, separation at 55+). Check IRS Pub 590 before assuming the 10% applies to you.
How the math works
- Under 59½: ordinary income tax (federal bracket + state) + 10% penalty. The plan withholds 20% federal automatically; if your bracket is higher, you owe the rest at filing.
- Lost growth: amount × (1 + rate)^years. Money pulled at 32 with 30 years left costs ~7.6× its face value by age 62 at 7%/yr.
- Loans: no tax/penalty if repaid, but repayments come from take-home pay and the borrowed balance stops compounding, the opportunity cost row shows that; loan default converts to a full taxable withdrawal + penalty.
- Cash-out after a job change is the most expensive move on this list: it front-loads the entire year's tax bill on the whole balance.
How much of a 401(k) withdrawal do you actually keep?
Typically 60–70%. A $20,000 hardship withdrawal at age 32 in a 22% bracket with 5% state tax nets about $12,600 after tax, penalty, and extra-season withholding, before counting the growth it cost you.
Is a 401(k) loan free money?
Not free, just deferred. You pay the market's rate of return out of your paycheck, and the borrowed dollars stop compounding. Default on a loan while changing jobs = full taxable withdrawal plus the 10% penalty.
What is the hardest math on this page?
The lost-growth row. Every dollar pulled at 32 is worth ~$7.60 at 62 at 7% annual growth. That number, not the check, is the price of the withdrawal.