Should I withdraw from my 401k?

Whatusername

Whatusername

Well THIS is awkward!
My previous job I in 2012 had a 401k that was set up. The amount is not very big (about 1000 bucks or so). I'm thinking about liquidating it to pay off a loan from that particular year of "fun". And to have some emergency savings.

I do know that there is about a 20% penalty on this. And I'm enrolled in a 401k at my current employer that has more in it. So it's not like I'm closing everything out.
 
You threw it out there so I'll comment on it...
If your 401k has "about a $1,000":
1) your loan can't be too much and should be fairly easy to pay off
2) whatever's left is even smaller and I wouldn't consider "emergency savings"
3)sign up for a promotional interest free credit card, put your daily expenses on that, use the accumulated money to pay off the loan. Roll the 401k into an IRA
d)I know your asking for advice but honestly if your asking these kind of questions you really should have a financial advisor work with you or an adult.
 
I'm largely onboard with @drunkenbeagle and his answer based on the limited information provided. @mikecweb has a quick finger because he got in before me.

Generally, if you have any debt (other than house and maybe car), you are paying an interest rate higher than you will earn by investing in the market(in the short term at least).
 
Unless you are good at managing your own fund, these days, you're probably paying higher interest on a loan (especially a credit card) than you're earning from the market (in a typical mutual fund). However, don't forget the penalties for the early withdrawal.

I'll agree with Mike here, that for $1000, at the end of the day, it just doesn't matter.
 
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