401(k) & IRA Early Withdrawal Penalty Calculator (2026)
See the real cost of an early 401(k) or IRA withdrawal — ordinary income tax plus the 10% additional tax — and which IRS exceptions actually apply to your account type. The Rule of 55 only works on employer plans; the first-home exception is IRA-only.
What you actually keep
$14,250
out of $20,000 withdrawn — 71.3%.
Federal cost breakdown
What gets withheld right now vs. what you actually owe
Withholding falls short of what you actually owe by $1,750 — plan to owe that at tax time, not just get it automatically. 401(k)/403(b) distributions paid directly to you (not a direct rollover) must have 20% withheld by law; IRAs default to 10% but you can elect a different rate.
Estimate only. Federal tax only (no state tax), assumes a traditional (pre-tax) account — not modeled for a Roth 401(k)/IRA, where qualified withdrawals aren't taxed the same way. Only the exceptions listed are modeled; medical expenses over 7.5% of AGI and qualified higher-education expenses are real exceptions but need their own dollar calculation and aren't included here. SEPP (72(t)) is treated as a simple yes/no — actually setting one up requires an IRS-approved calculation method and a multi-year commitment, not modeled. This is general information, not tax, legal, or financial advice.
Frequently asked questions
Q.Why does the same exception work differently for a 401(k) and an IRA?
Because the two are covered by different IRS rules — Topic 558 for employer plans like 401(k)s and 403(b)s, Topic 557 for IRAs. The Rule of 55 and QDRO payments are built around “separation from service with your employer,” a concept that doesn't exist for an IRA (there's no employer to separate from), so neither applies there. The first-time home purchase exception (up to $10,000) and qualified higher-education expenses, conversely, only appear on the IRA list.
Q.If I qualify for an exception, do I avoid tax on the withdrawal entirely?
No — an exception only waives the extra 10% penalty. The withdrawal is still ordinary taxable income, stacked on top of whatever else you earn that year, at your normal marginal tax rate. The only ways to avoid taxation entirely are a qualified Roth withdrawal (not modeled here) or a direct rollover into another retirement account rather than a withdrawal at all.
Q.My 401(k) withheld 20% — is that my actual tax bill?
Not necessarily. The 20% (401(k)) or 10% (IRA default) withheld at the time of distribution is a prepayment estimate required or defaulted by law, not a calculation of what you specifically owe. Your actual federal cost depends on your full year's income and bracket, plus whether the 10% additional tax applies — which is exactly what this calculator estimates. You settle the difference, either way, when you file.
Q.What about medical expenses or higher education — why aren't those in the dropdown?
Both are real exceptions, but unlike the Rule of 55 or the birth/adoption exception, they don't exempt a fixed amount — the medical exception only covers unreimbursed expenses above 7.5% of your adjusted gross income, and the education exception is capped at your actual qualified expenses for the year. Both require a calculation this tool doesn't have the inputs for; see IRS Topics 557 and 558 above for the exact rules if either applies to you.
Sources
- IRS Topic 558 — Additional tax on early distributions from retirement plans OTHER than IRAs (Rule of 55, QDRO)
- IRS Topic 557 — Additional tax on early distributions from traditional and Roth IRAs (first-time home purchase, higher education)
- IRS — 401(k) Resource Guide, Plan Participants: General Distribution Rules (mandatory 20% withholding, the 10% additional tax)
- IRS Topic 413 — Rollovers from retirement plans (IRA default 10% withholding, Form W-4R)