401kTransition

What would cashing out your old 401(k) cost?

A quick 2026 estimate of the taxes on cashing out, next to what a direct rollover would cost. Nothing you type here leaves your device.

2026 federal figures from the IRS · Last reviewed

The pre-tax part of the old 401(k). Leave out any Roth money.

$

Pay and other taxable income before the cash-out. A rough number is fine.

$
How do you file your taxes?

A rough rate is fine. Some states have no income tax: enter 0.

%

Cashing out $50,000 could cost you about

$18,564 (37%)

You’d keep about $31,436 after taxes.

Federal income tax on the payout$11,064
Extra 10% tax before 59½$5,000
State income tax (your rate)$2,500
Total$18,564

The check you’d get

$40,000

The plan must hold back 20% ($10,000) for federal tax. Your state may hold back more.

Federal tax still due when you file

$6,064

The 20% is a prepayment. With this payout, your top federal rate would be 24%.

A direct rollover, or leaving it in the old plan: $0 in tax now

Moving pre-tax money straight to a traditional IRA or a new employer’s plan, or leaving it where it is, keeps all $50,000 in a retirement account. You pay income tax later, when you take money out.

What this estimate includes, and what it leaves out

  • 2026 federal tax rates and the standard deduction ($16,100 single, $32,200 married filing jointly), with your other income taxed first and the cash-out on top.
  • The extra 10% tax on money taken out before 59½, unless the rule of 55 applies: you left this job in or after the year you turned 55. It doesn’t apply to plans from jobs you left earlier, or to IRAs. Other exceptions exist; the IRS lists them.
  • State tax at the single rate you enter. Real state taxes can have brackets, credits or exemptions for retirement income.
  • It leaves out Roth and after-tax money, company stock, loans, other deductions and credits, and any tax on Social Security. It’s an estimate, not tax advice: a tax professional can check your own numbers.

Sources

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