<prompt> Human: This is my last week at my current job. I start the week after with a new company. The problem im facing is that my wife and I wont be able to carpool any longer. We had planned on buying a car this summer but due to this change of employment we need to do this sooner. Ive got 4k in my 401k with this company. What are the penalties for pulling that money out when I leave to buy a car? Is this a horrible idea?We can get by for a couple weeks possibly months but we WILL need a second car. How do I go about taking this money out? Its manged by fidelity investments. Is this a an absolutely horrible idea?  <response>: OP I dont know what your salary is but youre going to pay a 10 early withdrawal fee and taxes at whichever tax bracket youre in. This means if youre making over 10kyr youll pay 25 to uncle samthats 10 penalty plus 15 tax rate and if you make over 36kyr youll pay 3510 penalty plus 25 tax rate.This means youll be paying between 1,000-1400 just to take out of the 401k not to mention the long term opportunity cost of not having the money invested is going to hurt you quite a bit. Now if you absolutely cant afford to pay for the car by any other means then youll need to do what you need to do but even a higher interest short term car loan would be financially smarter than liquidating your 401k. Shit, a cash advance for 4k off a credit card that is paid back in 6-8 months would be a better option.edit: if youre interested I just did the math and if you advanced 4000 off a credit card at 22 interest and paid it off in a year youd pay around 500 in interest which is substantially less than any penalties youd likely see from liquidating the 401k. if you got a medium interest car loan8 for two years youd pay like 350 in interest on 4k. If you even have a basic ability to borrowpersonal loan from a cc company, credit card, small car loan, etc that would be an infinitely better choice than liquidating the 401k without even considering the lost long term gains that 4k could bring youto give a rough estimate 4k at say 8 annually for even 20 years turns in to over 18,000- if we extend that term to 30 years its 40,000. 