2026 tax year
Retirement withdrawal calculator
Pulling money out early can lose a third of it to tax and penalty. Converting is the same tax, no penalty.
A withdrawal from a traditional IRA or 401(k) is ordinary income, and before age 59½ it usually carries a 10% penalty on top. A Roth conversion is the same taxable event, you move money from traditional to Roth and pay income tax now, but with no penalty, and the payoff is tax-free growth later. This works out both.
Under 59½ triggers a 10% penalty.
Enter the amount and your income.
Worked example, a $20,000 early withdrawal at 45
Someone aged 45 with $60,000 of other income pulls $20,000 from a traditional IRA:
| Line | Amount |
|---|---|
| Federal income tax | − $3,750 |
| State income tax | − $550 |
| 10% early-withdrawal penalty | − $2,000 |
| You actually receive | $13,700 |
| Effective rate on the withdrawal | 31.5% |
Of the $20,000, only $13,700 reaches your pocket, an effective 31.5%, because the $2,000 penalty stacks on income tax. A $30,000 Roth conversion at a lower income, by contrast, costs $4,950 with no penalty. And every future dollar of growth comes out tax-free.
Questions
How much tax on an early 401(k) or IRA withdrawal?
Your ordinary income tax rate plus a 10% penalty if you are under 59½, plus any state tax, often 30 to 45% all in. Exceptions to the penalty exist: a first home (IRA, up to $10,000), disability, large medical bills, higher education, and substantially equal periodic payments.
What is a Roth conversion good for?
Paying tax on retirement money now, at a known rate, so it grows tax-free and comes out tax-free later, valuable if you expect higher rates or a low-income year (early retirement, a gap year, a business loss). Convert only enough to fill a low bracket; the calculator's marginal-bracket line shows where you are.
Should I pay the conversion tax from the IRA?
No. Pay it from outside the account, so the full converted balance keeps growing tax-free. Paying the tax from the IRA both shrinks the balance and, if you are under 59½, can itself be a penalized early withdrawal.
What about required minimum distributions?
Traditional accounts require withdrawals starting at age 73, taxed as ordinary income. Roth IRAs have no lifetime RMD for the owner, another reason conversions appeal to those who do not need the money. This calculator covers voluntary withdrawals and conversions, not the RMD schedule.
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- Paycheck calculator your marginal bracket
Estimate for the 2026 tax year. Penalty exceptions and RMD rules can change the outcome. Not tax or investment advice.