5/28/2023 0 Comments Investment drawdown calculator![]() ![]() The tool assumes that you will incur this 10% penalty if you are currently under 59 ½. 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 early withdrawal penalty, if any, is based on whether or not you would be taking the withdrawal from your retirement plan prior to age 59 ½. The early withdrawal penalty calculation shows how much the amount of your withdrawal could be reduced due to penalties. State income taxes may also apply, but are not assumed by the tool. The federal tax rate assumed is the percentage you enter into the tool. Withdrawals from your qualified plan are taxed as ordinary income at the federal tax rate at the time of the withdrawal. The impact of income taxes calculation shows how much the amount of your withdrawal could be reduced due to taxes. Please note no changes have been made to the Early Withdrawal Calculator to exclude the tax and the illustration will continue to include the early withdrawal distribution tax.) You should consult your tax advisor to determine your specific tax situation. (Additional Information: As part of the CARES Act, coronavirus related distributions, made in 2020, are not subject to the 10% early distribution tax. Taxes and penalties are assumed to occur for those under age 59 1⁄ 2. The tool illustrates the potential impact of taxes and penalties (if applicable) on the amount of an early withdrawal from your retirement account. Note: Although the tool asks you to enter your reason for the withdrawal, this is for internal tracking purposes only and is not considered in your calculation.Īssumptions and methodology used to generate the tool’s results: If you do not know your federal income tax rate, the tool will estimate it based on the current annual salary that you enter, as well as other information about any deductions to your gross annual income that you provide
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