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Most 401K plans allow you to take a loan against it. Any interest, etc. is paid back to your account via your paycheck. I've done it multiple times when I need some cash for some big purchases. I believe the limit is 50% of your 401K and not all of it.
It is the best way to access your 401K funds without taking a penalty.
Of your plan has a loan option, you can borrow 50% of the balance up to $50,000. The interest rate is usually pretty low, and you have 5 years to pay it back, longer if it’s to buy a house.
They will take payments out of your paycheck automatically. If you leave company, you’ll need to pay it back immediately unless your next employer’s plan accepts loans. If you don’t pay it back, the entire loan will be considered a distribution, and you will need to pay taxes on the entire amount, plus a 10-percent penalty unless your 60 or older.
Off your financial obligations are serious, such as you might lose your house or a serious medical condition, go to the IRS web site to look at whether your situation qualifies as a “hardship.” Hardship distributions are allowed for certain situations. You can withdraw all of the assets of necessary, but you’ll need to have maxed out a 401k loan first. And you’ll be prohibited from participating in the plan for 6 months.