<prompt> Human: I know my title is already making some people cringe, but hear me out.Im with a company now that has an ESOP program, which Im currently 80 vested in. I had a 401k with the previous company I worked for which neither I nor the previous employer have contributed to for over a year. Ive been thinking about rolling it into an IRA or ROTH, but didnt want to go through with it until I fully understood the process, so Ive just had it sitting in the old 401k account. According to my last statement, its worth just shy of 5k.Rent has increased in my city by a lot, and once our lease is up in May 2017, the company who just bought my apartment complex is going to raise our rent by about 150 a month, which will be about on the level of the price of rent in our city.My fiancé 30f and I 30m each make 50kyr and the only debt we have is my student loan which, as of this month, has just under 40k left on it. For the last few months, Ive been throwing all the money I can at that to get it paid off ASAP.Recently she and I were talking and we realized that with our rent going up, depending on how much a house costs and how much we can put down on a payment, we might actually be able to pay less for a mortgage if we bought a house than we would pay in rent, taxes, insurance, etc. Additionally, it would be a little more worth it since wed eventually own it and have an actual financial investment in the property as opposed to paying rent to someone elses pocket. And now, with her grandmother passing away earlier this year, my fiancé has come into a bit of an inheritance we could use on a down payment, which has sped up that conversation a bit.We have enough money that we can put 20 down on an offer we just made for 258k on a good home, and we will have a couple thousand leftover to help cover closing costs and purchase appliances washerdryer, refrigerator. In addition to that, between the 2 of us, we have about 5k in savings.So this brings me to my actual question. With the money we are putting toward the down payment, the closing costs, and the cost of moving renting a Uhaul, pizza and beer for our friends who help, etc Im now afraid we wont have much of a cushion left in savings until we can build it back up again for a couple months after moving in assuming our offer gets accepted.I know if I cash out my 401k, Ill get hit with a 20 tax on it, which would be around 1,000, leaving us with about 4,000 we can put toward the house or savings. I know Ill be taking a bit of a hit to my long-term investment, but Im wondering if, since Im only 30-years-old, theres not much in it, and most of it was either money my employer contributed plus the earned interest, if it would be smarter to think about the short term of having a bit of a cushion in my savings moving into a new home right off the bat. I tend to be pretty fiscally conservative and the prospect of having no, or very little savings kind of freaks me out in case disaster hits and Id have to charge something to credit and go even more into debt without any financial cushion.I know there are pros and cons to leaving it alone and rolling it into an investment, as well as with cashing it out, but Im having a hard time deciding which decision potentially has more drawbacks.Any insight would be appreciated!tl;dr: I have an old 401k worth 5k. Putting 20 down payment on a house worth 258k. Should I cash out 401k to pad my savings account?  <response>: You may be able to avoid the tax implications if you rollover the 401k to an IRA, and then withdraw it. If this is your first home, you can withdraw up to 10k from an IRA without penalty it does get added to your income though, iirc.That said, I dont think I would advise that you do this. You two make a combined 100k, and your 401k withdrawal would only give you 5k if you chose to just pay the tax penalty at the end of the year. Id be surprised if you couldnt focus and save up that 5k in just a few months after you buy the house. 