By entering his or her current age, projected retirement age, expected return, and current plan balance, a 401(k) participant can obtain the amount of penalties and taxes they will pay and what will be left of their distribution from the cash-out calculator. In addition, the calculator informs participants what the savings will be worth at retirement if left to grow in a qualified retirement account.
As an example, RolloverSystems said a 35-year-old plan participant wanting to retire at 65, who has a $5,000 balance and expects an 8% return will find she could pay $500 in penalties and $1,500 in taxes, leaving her with only $3,000 in cash. The calculator would also show that if she rolled over the savings into an IRA, the $5,000 would grow to be worth more than $50,000 at retirement.
The cash-out calculator is available at www.rolloversystems.com .