<prompt> Human: When I first started with my employer 6 years ago I started contributing to the 401k because they offered 4 contribution matching so I figured it best not to let free money go to waste. Now Im 29 with around 18k sitting in my 401k not including the 4,000 Im paying back on a 401k loan and...around 9,500 in personal debt. Im struggling to keep up with payments on two discharged visas 3,500 plus student loans 6,000, and my credit has tanked over the last couple of years. I took a loan from my 401k last year to help pay stuff off, but couldnt take a loan high enough to cover everything so while it helped Im still struggling to make ends meet. Im not eligible to take another loan out until I finish repaying the existing one. I drew up a budget for myself recently, trying to curtail bad spending habits so I can stop living paycheck to paycheck and start putting away some money to buy a house at some point. I know that early withdrawals in retirement accounts are pretty much 100 frowned upon, especially for paying off debts but I cant help but think that being able to pay off my outstanding debts and start rebuilding my credit and being able to put away money outweighs the negatives of early withdrawal. That having been said I know almost nothing about retirement investing, is there something Im overlooking with this? I know there are penalties for early withdrawal but I really dont know what they are exactly. Can I withdraw from my 401k while still continuing to make contributions to it?  <response>: You generally are not allowed to withdraw from your 401k while you still work for the company who sponsors it. There are a few employers who allow this, but Id say the vast majority do not. So this likely isnt going to be an option for you unless you leave your employer.The penalties for early withdrawal would be that youd have to pay income taxes at your marginal federal and likely state tax rates, plus a 10 penalty tax on top of that. So you can count on losing somewhere around half of the amount withdrawn to taxes and penalties. 