401(k) withdrawal: how much you keep after tax
Money you take out of a traditional 401(k) and receive yourself is ordinary income in the United States. Four things hit the same withdrawal:
- Federal tax by bracket (Form 1040 §1, Rev. Proc. 2025-32) on your income for the year plus the withdrawal.
- 10% additional tax if you are under 59½ (IRC §72(t), IRS Topic 558). It has its own page: the 10% on early distributions.
- Mandatory 20% withholding when the plan pays you (IRS Topic 413). It is a prepayment, not an extra cost.
- State income tax, if your state taxes income and does not exempt qualified plan distributions.
This calculator puts the four pieces together and answers the practical question: how much money actually reaches you.
withholding 20% = withdrawal × 20% (only when the plan pays you) cash on the payout date = withdrawal − withholding federal tax on the withdrawal = tax(annual income + withdrawal) − tax(annual income) additional tax = withdrawal × 10% if age < 59.5 total cost = federal tax + additional tax + state tax net after tax = withdrawal − total cost
Worked example: $25,000 at 45 with $75,000 of other income
Single filer, no state income tax, paid directly to you:
| Line | Math | Amount |
|---|---|---|
| Gross withdrawal | Plan amount | $25,000.00 |
| Mandatory federal withholding | 20% × $25,000 | $5,000.00 |
| Cash on the payout date | 25,000 − 5,000 | $20,000.00 |
| Combined income | 75,000 + 25,000 | $100,000.00 |
| Federal tax on the withdrawal | 13,170 − 7,670 | $5,500.00 |
| 10% additional tax | 10% × $25,000 (45 < 59.5) | $2,500.00 |
| State income tax | State with no income tax | $0.00 |
| Total cost | 5,500 + 2,500 + 0 | $8,000.00 |
| Net after tax | 25,000 − 8,000 | $17,000.00 |
The effective rate is 32% ($8,000 ÷ $25,000). The $5,000 withheld is smaller than the actual federal tax ($5,500 + $2,500 = $8,000), so $3,000 is still due at filing.
How it changes with age, income and state
| Scenario | Withdrawal | Age | Other income | Total cost | Net |
|---|---|---|---|---|---|
| No other income | $10,000 | 45 | $0 | $1,000.00 | $9,000.00 |
| Base example | $25,000 | 45 | $75,000 | $8,000.00 | $17,000.00 |
| At age 61 | $25,000 | 61 | $75,000 | $5,500.00 | $19,500.00 |
| Married filing jointly | $50,000 | 55 | $40,000 | $10,660.00 | $39,340.00 |
| State with a 5% marginal rate | $25,000 | 45 | $75,000 | $9,250.00 | $15,750.00 |
What is in and what is out
| Item | In this calculator? | Note |
|---|---|---|
| Federal tax by bracket on the withdrawal | Yes | Form 1040 §1 tables, Rev. Proc. 2025-32 |
| 2026 standard deduction and the 65+ extra | Yes | §63(c) and §63(f), Rev. Proc. 2025-32 §2.14 |
| Mandatory 20% withholding | Yes | Only when the plan pays you (Topic 413) |
| 10% additional tax before 59½ | Yes | Added here; the full explanation lives on the 10% page |
| State tax at your marginal rate | Yes | Nine states do not tax individual income |
| 10% exceptions (age-55 rule, SEPP, and others) | Partly | Equal periodic payments (SEPP) and RMDs are selectable |
| Your state's own brackets, deductions and exemptions | No | Enter your marginal state rate; the page does not rebuild your state base |
| Local taxes, IRMAA, NIIT, taxable Social Security | No | Out of scope in this version |
| Roth 401(k), after-tax basis, employer stock (NUA) | No | The math assumes a fully taxable traditional balance |
The 20% withholding is not an extra cost
The plan must withhold 20% of what it pays to you, even if you roll it over within 60 days (IRS Topic 413 and Pub. 575). That money is a credit against your federal tax for the year: if you owed less, you get the difference back; if you owed more, you pay the difference. A direct rollover to another plan or an IRA avoids both the withholding and the tax for that year.
Related: 20% withholding on rollovers, the 10% on early distributions, effective and marginal tax rate, US take-home pay.
These numbers are an educational estimate using the published 2026 tables. They exclude local taxes, your state's own deductions and brackets, IRMAA, NIIT, taxable Social Security, credits and your after-tax basis. Rules change by year and by situation: confirm with a professional before deciding.
Sources
- IRS Topic 413 — Rollovers from retirement plans: mandatory 20% withholding on eligible rollover distributions paid to you.
- IRS Topic 558 — Additional tax on early distributions: the 10% before age 59½.
- IRS Publication 575 — Pension and Annuity Income: withholding rules and payout options.
- Rev. Proc. 2025-32: §1 rate tables and the standard deduction for 2026.
- Tax Foundation — State Individual Income Tax Rates and Brackets, 2026: states without an individual income tax.
- Federation of Tax Administrators — State tax agencies: check your own state's rules.
No. It is a prepayment of federal income tax: the plan withholds it when it pays you and you claim it on your return. With $25,000 at 45, $75,000 of other income and a single filer, $5,000 is withheld and the total federal tax (including the 10%) is $8,000, so $3,000 is still due at filing.
With $75,000 of other income, single and no state tax: $5,500 of federal income tax, $2,500 of the 10% additional tax and $17,000 net, which is 32% of the withdrawal. That is the worked example on this page.
The 10% additional tax goes away. The same $25,000 leaves $19,500 net (22% of the withdrawal) because only ordinary income tax remains.
With the marginal rate you enter. Nine states do not tax individual income (Washington taxes capital gains only), and many of the states that do tax income exempt all or part of qualified plan distributions, so confirm yours before using a rate other than 0.
No. When the plan transfers the money straight to another plan or an IRA there is no mandatory withholding and no tax that year (IRS Topic 413 / Pub. 575), and the 10% additional tax does not apply either.