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MEC vs Non-MEC

MEC cost quantified.

Withdrawal scenario

CV

Basis

Withdrawal

Marginal rate

Age

Tax impact

Non-MEC (FIFO)

Basis first tax-free

Withdrawal—

Tax-free—

Taxable—

Income tax—

10% penalty$0

Total tax

—

MEC (LIFO)

Growth first + penalty

Withdrawal—

Tax-free—

Taxable—

Income tax—

10% penalty—

Total tax

—

Cost of MEC

—

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Reviewed by

Tayde Aburto · Founder & Editorial Lead

Last updated: August 2026

Notice: This content is strictly educational. It does not constitute personalized financial, tax, legal, or investment advice. For decisions specific to your situation, consult a licensed professional. Read our editorial policy.

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