<prompt> Human: Ok, looking for some advice. Im 54 years old, recently divorced. I have a pension plan from my previous employer that Im not planning to touch until retirement. Also, Im 7 years in another job that will also pay a pension if I make it 3 more years. I have one 401k plan Im investing in, and another from a previous employer which is around 150k. My current wife and I are debt free other than about 12k. Our current home sale would net us about 30k. We are considering taking that, combining it with the cashed out 401k which would be about 88k after taxes and penalties, and just outright purchasing a modest home in a nearby small town. Its around 1000 sq. Ft, and well kept. It would leave us a nest egg of about 30k for emergencies, and being completely debt free, we could contribute to our current 401 k at a max level. Any thoughts? Is there a better way? Thanks!  <response>: Dont pay early withdrawal penalties in your 401k. Theres better ways to access the money.At the very least, youre better off if you take out a mortgage and reduce your 401k contributions to offset your mortgage payments. Its equivalent to taking cash out of your 401k, except without the penalties. 