Well, if a traditional 401k, and all your other income is exactly the same as last year, then that 5k would be taxed at approximately your marginal tax bracket %. So, if you are normally in the 22% tax bracket, that might add $1100 to your tax liability .
Of course, the 401k provider may have some automatic tax withholding as a part of any distribution, so you should ask them about that. IF they give you a choice as to how much to withhold, you could designate a % about whatever % tax bracket you were in last year, and that wouldn't be unreasonable.....though you might not need that much withheld if you normally get a refund.
But then, if you are 65 next year, you might be eligible for the extra $6k income deduction for a single senior citizen. (12k if married/MFJ and both are 65 or older & not allowed for MFS)
That might offset the 5k distribution when taken next year instead....IF you are eligible for it.
It phases out for MAGI starting/ending at:
Single: $75k - to $175k
MFJ: $150k - to -$250k
Just wait thirty days - your situation will be more favorable next year.
I'm not sure I agree with my colleagues. Assuming no more changes to the tax law (which is a big assumption), then it's a zero-sum game. Suppose you would normally pay $5000 in taxes this year. The withdrawal would increase your tax to $6000, and next year when you turn 65 you would pay $4000 after taking the extra senior deduction into account. If you delay the withdrawal, you pay $5000 this year and $5000 next year -- nets out the same. (*Numbers are approximate, and ignore the effect of inflation and opportunity cost.)
It really depends on what the money is needed for--if you would be forced to pay extra interest to borrow the money for a month (or carry it on your credit card or whatever), then it's probably better to not pay the interest.
Remember that money is meant to serve our needs, not the other way around.