You are thinking of withdrawing all your funds; $45,000 from your 401 (k) at age 54. The normal tax rate for you would be 28%. The rules for withdrawing funds before the age of 59 1/2 is a 10% penalty. How much would you save if you waited until age 59 1/2?

you don't save any money, you lose money instead

Explanation:

Given,

At 54, there is a tax rate of 28%

At 59½ there is a penalty of 10% with the tax rate of 28%

Therefore at 54, money left after tax = $45000*(1-0.28)=45000*0.72=$32400

At 59½, money left after tax =$45000*(1-0.10)*(1-0.28)= 45000*0.90*0.72=$29160

Money lost =29160-32400= -$3240

tip $2.90

total $17.40