<prompt> Human: I am planning on purchasing my first home in the summer of 2016. I was wondering if I can start maxing out to my 401k now and withdraw it later to use it as a down payment for my first house. Would this be a sound idea?  <response>: Absolutely not - theres no special provision allowing you to withdraw money from a 401k to pay for a house or a down payment for one. You will be subject to tax fine, as you would anyway if you never put it in the 401k but also the 10 penalty for a hardship withdrawal which will erase any sort of tax advantage you could possibly get.You could borrow from your 401k, but thats a terrible move as well, because if you lost your job or quit, youd have to pay that back within 60 days, which could then invoke problems if this happened before you were able to save up enough to cover the balance while being house-poor at the same time. If you dont pay it back, then you at least get hit with a big taxpenalty bill. Better than forclosure, but who wants to owe money to the IRS?So, use the 401k for retirement. For a down payment, especially one so short term, you want a safe spot like a savings account. And even if you did want to risk it and invest this money, a normal taxable investment account is preferable to the 401k since while you will be taxed on gains, you wont have a penalty.There are a few other options like the Roth IRA, or you could do 401k - in service withdrawal to Traditional IRA if your plan allows them - 10,000 penalty-free withdrawal but thats really unnecessary because you should still be using retirement funds for retirement, and savings accounts for savings. 