401(k) Distribution Calculator

Every dollar out of a traditional 401(k) is taxable income. This calculator grosses up each withdrawal for your tax rate so the monthly number you enter is what actually lands in your bank account.

The tax drag on 401(k) distributions

A $600,000 traditional 401(k) is not $600,000 of spending money. If your blended federal and state rate in retirement is 20%, it is closer to $480,000 after tax — and taking $3,500 a month of spending requires withdrawing $4,375. That 25% larger withdrawal is why a 401(k) runs out sooner than a Roth or taxable account of the same size. Enter your expected rate in the tax field; the calculator does the gross-up for you.

How the calculator works

Each month the balance earns one month of return, then the withdrawal is taken out. Every 12 months the withdrawal is increased by the inflation rate so your spending power stays level. If you enter a tax rate, each withdrawal is grossed up so the after-tax amount you keep matches the number you typed. The calculator stops when the balance hits zero, or after 100 years if it never does.

The "to last 20 / 25 / 30 years" figures are solved by bisection: the largest starting withdrawal that still survives that horizon under the same return and inflation assumptions.

Rules that shape 401(k) withdrawals

• Age 59½. Distributions before this are generally hit with a 10% penalty on top of income tax, unless an exception applies.
• Rule of 55. If you leave your employer in or after the year you turn 55, you can take penalty-free distributions from that employer's 401(k) (not IRAs). Rolling the money to an IRA forfeits this.
• Required minimum distributions (RMDs). Begin at age 73 (75 for those born 1960 or later). The first-year RMD is roughly 3.8% of the balance and rises each year. Missing one costs a 25% excise tax on the shortfall.
• Withholding. Plans withhold 20% federal tax on most lump-sum distributions by default; periodic payments can be set at a different rate.

Choosing realistic inputs

• Annual return. 4–5% is a conservative planning number for a balanced portfolio; 6–7% is closer to long-run history for 60/40; cash and CDs are 3–5% today but fall when rates fall.
• Inflation. The Federal Reserve targets 2%; the 30-year U.S. average is about 2.5%. Healthcare inflation runs higher, so retirees with large medical costs should test 3–3.5%.
• Withdrawal. Use what you actually spend, minus guaranteed income (Social Security, pension, annuity). That net gap is what savings must cover.

Should you roll the 401(k) to an IRA first?

An IRA usually offers lower-cost funds and more withdrawal flexibility, and consolidating old plans simplifies RMDs. Reasons to stay: the Rule of 55, strong creditor protection under ERISA, access to stable-value funds, and — for those with company stock — the net unrealized appreciation (NUA) strategy, which is lost on rollover. The decision does not change how long the money lasts in this calculator; it changes fees and taxes, which you can reflect in the return and tax fields.

SavingsLast calculators are educational estimates. They assume a constant average return and steady inflation; real markets are volatile and sequence-of-returns risk can shorten how long money lasts. Nothing here is financial, investment, tax, or legal advice. Consult a qualified professional before making decisions.