Taxation of US retirement distributions
Distributions from pre-tax retirement accounts are taxed as ordinary income at federal marginal tax brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%), plus state and local income taxes.
They do not qualify for preferential long-term capital gains tax rates, making tax-bracket management in retirement essential.
Worked example: US retirement withdrawal tax
Withdrawing $40,000 from a Traditional 401(k) alongside $25,000 in Social Security/other income results in estimated federal income tax of approximately $5,400 (at effective 13.5%) plus $2,000 in state taxes (5%), delivering $32,600 in net income.
Inputs for the us pension drawdown tax calculator
01
Withdrawal & Other Income
Enter total annual withdrawals and existing taxable retirement income.
CALCULATOR QUESTIONS
US pension drawdown tax calculator questions
Are Roth IRA withdrawals subject to income tax?
No, qualified distributions from Roth accounts are 100% tax-free at both federal and state levels.