401k

Max you can take is 50k and you have to run it through your employer if you are still with the company holding the 401k.

good to know although i wont take anything close to 50k. thanks 

As you pointed out, it's not the best thing to do.  You'll miss out on all those years of tax-free-compounded wealth building on the amount you take out.  That's a big deal.

As an example,  if you take out $25k from your 401k and assume an 8% annual return every year for 30 years (when you're 65), you're missing out on more than $200k in tax free growth !!

Far too many people use their 401ks as a piggy bank.  Sure, for medical, I get it, but not for too many other purposes is it warranted.

Borrow the money from the bank instead, or forgo the borrowing idea altogether.

Rush,

Usually 401k loans are not WD's but loans, so you pay back the loan with interest (paid from you) and no money has left the plan, its just considered a loan until you pay it back.

It can come in handy for a house purchase or if you have an item of great need and if you want to pay it back at any time you can without recourse.

I'd say its a bad idea to pay off consumer debt or if the ammt is a large percentage of your total 401k portfolio.

Depends on the use of the funds to me and if you can afford the monthly ammt taken out. Most 401k loans are amortized over a 5 year period but that also depends on what the employer has established.

Id say if you are going to use the funds for something that will give a good return on investment or that is critical then yeah thats not such a huge ammt if you can afford the payment and if you do repay it quickly.

If it is for consumer debt or vacation or a car or something that will depreciate then no, also check and see if the funds keep working while you repay...I think there is a good chance that you are not selling any assets rather just having a hold on the funds if you were to ever quit or be fired or try to access them.

Good catch Wall, but it's important to note that if this is treated as a "loan" instead of an "early withdrawal,"   you're still exposing yourself to a 10% penalty if you don't meet the terms of the loan's repayment plan.   Seriously , why expose yourself to  this potential penalty ?     I'd bet most people fall on a hardship and are unable to pay back the loan's terms, exposing themselves to the penalty.

I stand by earlier comments... If this is not for a medical hardship, you are far better off borrowing the money from a bank or credit union.  We all know here that borrowing money is dirt cheap, nowadays. 

Retirement money should be viewed as sacred, and never touched.  You'll appreciate that if you leave the money alone and let it prosper !!