401k Withdrawal Calculator

Multiply Current Annual Spending by 25 Here's a broad rule of thumb that you can use to figure out how much money you'll need when you retire: Multiply your current annual spending by 25. That's what your savings will have to be in retirement to allow you to safely withdraw 4% of that amount every year to live on.

Take the value of your 401k as of Dec. 31 of the previous year and divide that number by the number of your IRS life expectancy remaining years. The resulting number is your RMD, which is the minimum amount you must withdraw from your 401k that year.

The approach is simple: You take out 4% out of your savings the first year, and each successive year you take out that same dollar amount plus an inflation adjustment.

If you withdraw money from your retirement account before age 59 1/2, you will need to pay a 10% early withdrawal penalty, in addition to income tax. The tool assumes that you will incur this 10% penalty if you are currently under 59 ½.

There isn't a separate 401(k) withdrawal tax. Any money you withdraw from your 401(k) is considered income and will be taxed as such, alongside other sources of taxable income you may receive. As with any taxable income, the rate you pay depends on the amount of total taxable income you receive that year.

If you withdraw money from your retirement account before age 59 1/2, you will need to pay a 10% early withdrawal penalty, in addition to income tax. The tool assumes that you will incur this 10% penalty if you are currently under 59 ½.