Cash Out Calculator

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While it may seem tempting to cash out your retirement plan money for emergencies or short-term expenses, know that you could lose a significant portion of that 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. This calculator can help you decide.

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Marginal Tax Rate (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.

IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.

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