There are several ways to manage your retirement assets when you leave your company. This calculator will help you compare the effects of taxes and penalties on the taxable portion of a full distribution vs. continuing to allow it to grow tax-deferred, such as in a rollover IRA.

Enter your information in the fields and click on Calculate to see your results.

Definitions

Current retirement plan balance

The current tax-deferred amount you have in your retirement plan.

Hypothetical annual rate of return

The expected annual return on your investments. Since 1926, the average annual total return for the S&P 500, an unmanaged index of large U.S. stocks, has been nearly 10%. Investments that offer the potential for higher rates of return also come with a higher degree of risk. If you plan on withdrawing your money within a short period of time, such as five years, you may want to choose a more conservative rate of return. This calculator assumes that your return is compounded annually and there are no new contributions to this account. Hypothetical rates of return are for illustrative purposes only and are not intended to portray actual results. Actual rates of return will vary over time. Past results are not predictive of results in future periods.

Current age

Your current age.

Age at retirement

The age at which you plan to retire.

Federal income tax rate

The marginal federal tax rate you expect to pay on any additional earnings or taxable distributions. Use the table below to estimate your current tax rate.

Filing status and income tax rates for 2010 This information is subject to change by the IRS.
Tax rate	Married filing jointly or qualified widow(er)	Single	Head of household	Married filing separately
10%	$0-$16,750	$0-$8,375	$0-$11,950	$0-$8,375
15%	$16,751-$68,000	$8,376-$34,000	$11,951-$45,550	$8,376-$34,000
25%	$68,001-$137,300	$34,001-$82,400	$45,551-$117,650	$34,001-$68,650
28%	$137,301-$209,250	$82,401-$171,850	$117,651-$190,550	$68,651-$104,625
33%	$209,251-$373,650	$171,851-$373,650	$190,551-$373,650	$104,626-$186,825
35%	$373,651 and over	$373,651 and over	$373,651 and over	$186,826 and over

State income tax rate

The marginal state tax rate you expect to pay on any additional earnings or taxable distributions.

Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in each fund’s summary prospectus and prospectus, which can be obtained from your plan’s financial professional or downloaded and should be read carefully before investing.

This calculator was developed by KJE Computer Solutions, which is not affiliated with American Funds. It is intended for use in making a rough comparison of cashing out a taxable retirement plan account and continuing to allow it to grow tax-deferred. We do not guarantee the accuracy of the results or their relevance to your particular circumstances. We encourage you to seek the assistance of your financial professional.

For more information regarding this calculator or its calculations, please e-mail KJE Computer Solutions at afquestions@dinkytown.net or visit http://www.dinkytown.net.

Copyright ©2010 American Funds Distributors, Inc. | All rights reserved.

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