What can I expect to net from my 401k after the taxes and penalties if I withdraw $22,000?

Question

I live in Minnesota - I'm sure that will make some difference. Thank you!

Answer 1

$15,400

Answer 2

Initially they are going to take out 10% and they will offer to take out a full thirty percent to cover your taxes. Don't do this. If you own your house than you probably itemize on your taxes anyway. To offset this tax, you will want to make donations of clothing or furniture (anything you would normally sell at a yard sale, give away, or throw out), donate it to Salvation army or wherever you feel. Just make sure you get a receipt. Any business related expense you have such as mileage (if you do sales), job searching (mileage, recruiter cost, office supplies, even haircuts), medical mileage, tax deductions from any other investments. All this combined can offset your total you would otherwise have put out. But you can expect to have to pay out 10% immediately in penalties just for taking money out. Your other option is, most companies will offer you a loan against your 401k. This is not a bad idea because you will be paying yourself back the interest and you won't lose any vesting

Answer 3

About $12,000.

There's the 28% marginal federal income tax.
Then the 10% penalty for early withdrawl.
And MN state tax is about 7%

Plus the opportunity cost (the money you would have made if you kept it in)

Answer 4

I agree with the first answer regarding raw numbers. I strongly advise NOT withdrawing from you 401(k) early unless your only other option is bankruptcy.