<prompt> Human: In a nutshell, my husband just lost his job and it will probably take many, many months before he is employed again. No income, very little savings, lots of cc debt, mortgage, kids in college, no health insurance anymore ... a mess. He is 60 years old. I am wondering if it would be crazy to dip into his 401K to just pay off the house and credit cards? I know there are penalty fees associated with doing that but Im not sure what those fees actually are, but I am starting to panic about our situation. I just keep thinking about how nice it would be to know that we could at least eliminate the worry of not having a roof over our heads. Thanks to one too many refis, our mortgage payment is pretty hefty 2,000 and we still have 25 years to go. I could pick up a job in retail or administration that could keep us going in groceries, but not enough to keep up with the mortgage payment, too. Any advice?  <response>: If your funds are still in the 401k plan and you are retired, you can access 401k funds at age 59 12 and pay no early withdrawal penalty tax. A source but please also check with other sources... So he could either take out one big distribution, but also pay income taxes on that and income tax will be higher when the total amount of income in a year is higher; or he could take out enough money now to pay off the credit cards nuking them quickly is smart, and enough every year to just pay the mortgage meaning a lower income tax percentage while still allowing you to keep the roof over your heads. I would recommend you and he looking for work so that the both of you need to take out as little money as possible. Of course this plan also depends on how much money is in the 401k anyway. EDIT: If the situation is pretty complicated, it might be useful to talk to a fee-only and certified financial planner, preferably one recommended by smart familyfriends. 