<prompt> Human: Im 40 years old and I was laid off by a nationwide bookstore a month ago. For a few weeks I have played with the idea of opening my own store. It was mostly patronizing my delusions, I kept calling it looking for reasons not to, I wasnt really serious about it. Last week as I was wrapping up my market research I realized that it is actually possible and something that I actually want to do, not just dream about. My estimates are projecting 50-75,000 to open and have enough runway to reach a not losing money stage. The only meaningful asset I have is my 401k. My previous employer paid very poorly so my 401k is not huge, about 14,000 after paying into it for seven years. I dont have enough for a ROBS and I dont want to use that legal structure anyway. If I were to withdraw my funds I could have roughly 20 of my startup costs which is required for a SBA loan or to incentivize micro investors and affirm I am serious and putting my own money into the venture. 14,000 in a 401k is not hugely significant, left alone it will only be about 60k if I retire at 65. However if I withdraw it I can open a store and work for myself and chase a dream. I am mostly fully aware of the risks involved with starting a business and the challenges I would face. What feespenaltiestaxes will I be facing? Are there tax benefits or credits I could take advantage of that might offset the early withdrawal? Am I totally insane wanting to do this?Thanks for your advice.  <response>: That 14k will be taxed as income plus a 10 early withdrawal penalty. Depending on your tax bracket, you will likely owe a few grand up to almost half of that 14k. Then you even say yourself that it would be worth about 60k when you retire. So you are leaving 46k on the table.The biggest question is why you want to take from this? I presume you have no other cash available? If that is the case, opening a store is probably a terrible, terrible idea. You would want to have a years worth of income at your disposal before trying to start something like this. You will need a huge cash flow buffer - you cant rely on business to supply that from day 1. Especially if you plan on selling books. 