<prompt> Human: My wife lost her job, and she has to decide what to do with her 401K. The obvious thing is to simply roll it over to a new account, but we have been lightly considering using the money to pay off our house.Paying off the house would save us from the interest we would pay on it, which is 6, and it would allow me to afford going back to college without going into debt to do it, and possibly get a better job.We are in our early 30s, and we would still have my 401K, so it would not be our entire retirement savings. We dont really plan on doing this, its just an available option, we are much more likely to take a small amount out to refinance the house and rollover the rest. I am just crowd sourcing the pros and cons of this.  <response>: How stupid? VERY. You should avoid touching her 401k. Just roll it into an IRA. If you withdraw, you will likely regret it later. Nevermind the taxes, but the lost ROI and compounding effects will be substantial. 