<prompt> Human: 28 years old, Bay Area, CA.I have a 401k plan that was through my former employer. Its only about 10k. I worked there almost 6 years and basically had nothing to show for it though I only had the 401k for around 3-4 of those years. I started my own company, and Im currently struggling to stay afloat and basically chasing my dream.I wanted to see if I could withdrawal a couple grand from my account just to close out a loan payment I have to make every month for 300 thats only a few months away from being paid off. It would be a big burden off my back. Unfortunately my plan only seems to allow me to withdraw the entire amount.Im considering doing it, I know there are penalties, but in the grand scheme of things that 10k wont get me very far, especially once I hit retirement age. Even with the penalties, it could erase most of my debt and allow me an easier time trying to build my business and keep surviving.I work freelance so my income is iffy, some months its great other months its almost non-existent. Hopefully if things go my way, I can be making enough money that the 10k will be a drop in the bucket, and Im busting my ass to make that a reality.My only reason to wanting to leave it alone is that I could use it as a down payment for buying a home at some point without tax penalty, but its such a little amount that it wont mean much in California. Is there a way to put a down payment on a car without tax penalty? Because I could use a small car to work out of which would actually help my business grow at a much faster rate.Someone either talk me out of it, or tell me the best way to go about it and Ill be forever grateful.  <response>: You need to have a business plan and a retirement plan and you seem to have neither. There is no way to avoid the tax penalty. Your business finances and your retirement need to be separate in your head. You may love working for yourself - but you cant work until youre 80-90 years old. You need to have a plan to fund your business and save for retirement. If your business wont provide you enough income to do so - you need to find a job that does. If getting a car will grow your business to a point where you can make catch-up contributions then go for it - otherwise - get a plan to fund your business together. 