<prompt> Human: A friend of mine is switching jobs and has 5,000 in his 401k. He is looking to take a payout, but I know there are taxes involved. Can someone let me know how much they would deduct and what those deductions are so I can go back to him and let him know. Right now I dont know the penalties and taxes so Im not informed enough to tell him not to do it. Also, does he pay taxes on that amount for next years income tax return, or is that included in what he would have to pay if he accepts a payout?Sorry, novice here but I know general consensus is to leave retirement alone, I just dont know enough to argue this!  <response>: The money will be taxed at his marginal tax rate and he will have to pay a 10 penalty. So, if his top tax bracket is 25, the 5,000 would end up being about 3,250 and that doesnt include state income taxes.If hed like to save his money and not raid his retirement account, the correct thing to do is keep it in a 401k or roll it over into a Traditional IRA. 