Leaving the US: what do I net if I cash out my 401(k)?
Enter your balance and age to see what you keep after US withholding and the 10% early-withdrawal penalty, as a nonresident or a US tax resident, against leaving it invested to 59½.
WHAT YOU NET IF YOU CASH OUT NOW
$120k
At 34, cashing out $200,000 with 30% withheld and the 10% early-withdrawal penalty leaves $120,000, 60% of the balance. The plan pays out $140,000; the $20,000 penalty is owed with your US return, not taken at payout. Withholding is the default, not the final US tax bill, and tax in the country you move to is not counted here.
Withheld (30%)
$60,000
10% penalty
$20,000
You keep
60%
Net at 59½ if left
$370k
UNDERSTAND YOUR RESULT
Where your balance goes
Of $200,000, $60,000 is withheld at 30% and $20,000 is the 10% penalty (due with your return, not taken at payout), leaving $120,000 at these inputs.
Cash out now or leave it invested to 59½?
Left invested, or rolled over to an IRA: net if you take it out at that ageCash out now and invest what you keep
Cashing out now nets $120,000; invested at 3.9% a year after inflation, that becomes $317,043 by 59½ (before tax on the gains). Left invested for 25.5 years instead, the balance is $528,405 at 59½ and a withdrawal then nets about $369,883 in today’s dollars: $52,840 more than cashing out and investing what you keep, and $249,883 more than cashing out now.
What a lower withholding rate would change
30% withheldyour rate
$120k
15% withheld
$150k
0% withheld
$180k
The same $200,000 leaves $120,000 at 30% withholding, $150,000 at 15% and $180,000 at 0%, all after the 10% penalty. Which rate applies to you depends on your country’s tax treaty and on giving the plan a Form W-8BEN, and it is not settled for a lump sum. 0% withheld is not 0% tax: the country where you live can tax the payout.
What moves the needle
Each row re-runs the calculation with one change. Click to apply.How it's computed
FORMULA
Nonresident: withheld = balance × withholding rate (30% unless a treaty applies)
US resident: withheld = balance × 20%; tax = tax(other income + balance) − tax(other income), after the standard deduction
Penalty = balance × 10% (only if age < 59½). You keep = balance − tax − penalty
Left invested = balance × (1 + real return)^(years to 59½)
- You are a nonresident alien when the money is paid. If you will still be a US tax resident on the payment date, switch the residency question above: different rules apply, with 20% withholding on a taxable payout and regular graduated rates.
- Withholding is 30% of the whole balance, treated as pre-tax. 30% is the statutory default (IRC §1441) and the cash you would see at payout, not necessarily the final US tax: pension income from your US work after 1986 is generally taxed at graduated rates on Form 1040-NR (IRS Publication 519), so part of the 30% can come back when you file, and this page does not estimate that. A lower rate applies only if a treaty covers you and the plan holds your Form W-8BEN. This page does not look up treaty rates, and treaty relief for a lump-sum cash-out is not confirmed here: the US–India treaty’s private-pension article (Article 20) covers “periodic” payments, and its other-income article (Article 23) lets the US tax income arising here as well. Ask the plan and a tax adviser before assuming a rate below 30%.
- The 10% penalty (IRC §72(t)) applies to any payout before 59½ and is not reduced by leaving the country. Exceptions, such as leaving your employer in or after the year you turn 55, disability or substantially equal periodic payments, are not modeled. The plan does not withhold the penalty; it is reported on your US return.
- Not modeled: state tax, currency conversion, tax in the country you move to (0% withheld is not 0% tax), Roth or after-tax money, the extra deduction at 65 or older, and the true-up you settle when you file Form 1040-NR.
- Leaving it invested assumes a steady 3.9% a year after inflation, no fees and no forced payout, and the same 30% withholding at 59½. Amounts are in today’s dollars.
WORKED EXAMPLE · SAMPLE NUMBERS
$200,000 × 30% = $60,000 withheld. At 34 you are under 59½, so the penalty is $200,000 × 10% = $20,000. $200,000 − $60,000 − $20,000 = $120,000. Left invested for 25.5 years at 3.9% real growth, $200,000 becomes $528,405 in today’s dollars. At 59½ there is no penalty, so the same treatment leaves $369,883.
SOURCES
[1]NRA withholdingInternal Revenue Service[2]26 U.S.C. § 72(t) — 10-percent additional tax on early distributions from qualified retirement plansU.S. Code, Cornell Legal Information Institute[3]Topic no. 413, Rollovers from retirement plansInternal Revenue Service[4]Convention between the United States and India for the avoidance of double taxation, Articles 20 and 23Internal Revenue Service, treaty documents[5]Instructions for Form FTB 3805P, Additional Taxes on Qualified PlansCalifornia Franchise Tax BoardHSBuilt by Hussain Sehorewala · checked against worked examples · Sep 29, 2026
Keep this number honest as your life changes.
Put it on your Money Map and it re-runs as you change the seven numbers. It stays in this browser, and the calculator stays free.
Questions about this result
Usually yes once you have left the employer, subject to the plan’s rules. Leaving the country changes the tax, not the access: a payout to a nonresident alien is generally hit with 30% federal withholding unless a tax treaty lowers it, and the 10% early-withdrawal penalty still applies before age 59½.
The default is 30% of the taxable amount (IRC §1441). A tax treaty between the US and your country of residence can reduce it, but the plan applies the lower rate only if you give it a Form W-8BEN claiming the treaty. Treaty terms differ by country and by type of payment, and relief for a lump-sum cash-out is not automatic: the US–India treaty, for example, protects “periodic” pension payments in its Article 20, while its other-income article lets the US tax income arising here too. This page starts at the 30% default and lets you enter a lower rate.
Yes. Moving abroad is not an exception. The 10% additional tax applies to a taxable payout before age 59½ unless an exception fits, for example leaving your employer in or after the year you turn 55, total and permanent disability, or substantially equal periodic payments. The plan does not withhold it; it is reported on your US return (Form 5329). This page does not model the exceptions.
A direct rollover to an IRA is not a payout, so neither the withholding nor the 10% penalty applies at that point and the money stays tax-deferred. The tax arrives later, when you withdraw from the IRA, and for a nonresident it generally carries the same withholding rules. Some IRA providers restrict accounts for customers who live abroad, so check before you leave.
Neither. Withholding is the tax collected when the money is paid, not a final calculation. Pension income from your US work after 1986 is generally taxed at graduated rates when you file Form 1040-NR (IRS Publication 519), and a treaty may reduce the tax further, so you may be able to claim part of the 30% back. And 0% withheld is not 0% tax: the country where you live can tax the payout under its own rules, and a treaty decides which country taxes first. This page shows the US withholding, tax and penalty only.
The nonresident 30% rule does not apply. The plan generally withholds 20% of a taxable payout sent to you (IRS Topic 413), but that is a prepayment: the payout is added to your other income and taxed at regular rates on your return, and the 10% penalty still applies before 59½. Some states add their own tax, and California charges 2.5% on early withdrawals. Whether you are a resident depends on tests such as the substantial presence test, so settle that first; switch the residency question above to see the resident estimate. If you leave partway through the year, the status you will have on the payment date is the one that counts.
THE LEDGER · 10 min5 Retirement Mistakes That Cost $100K+ (Part 3 of 3)
THE LEDGER · 28 min5 Retirement Mistakes That Cost $100K+ (Part 2 of 3)
GUIDE · $39The Retire-Early Playbook