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 Your current federal income tax rate based on the percentage you enter.Assumed annual rate of return on retirement investments (any percentage from 1%-8%).Inputs used to generate the tool’s results Learn about how the results are calculated based on the assumptions and limitations of this tool Please consult your tax or legal advisors before taking any action that may have tax or legal consequences. TIAA does not provide legal, accounting, or tax advice. This information is provided for educational and illustrative purposes only and is not intended to constitute legal, financial, tax, or other advice. You should obtain personal advice from qualified professionals. The accuracy of this calculator and its applicability to your circumstances is not guaranteed. This information does not constitute an application, offer or commitment by TIAA, or a representation of interest rates, investment performance or any other future performance. The actual impact of your financial decisions may vary significantly from these estimates. These estimates should not be regarded as predictions, advice, or recommendations. The tool’s results represent analysis and estimates based on the information you have provided, but they do not reflect all relevant elements of your personal situation. The Early Withdrawal Calculator (the “tool”) allows you to estimate the impact of taking a hypothetical early withdrawal from your retirement account, including potential lost asset growth, tax consequences and penalties based on information you specify. When considering making an early withdrawal from your retirement savings, it is important to understand the potential impact of such a decision.
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