Well after all of the contimplation, I got the word back from my CPA. The IRA can be raided (if that word works) for a grand total of $10K with out a penalty. There are alot of exclusion with regaurds to the IRA that can get you out of the 12.5% penalty. The 401k can’t be touched. All penalties apply to the 401k regaurdless of the sob story. Though I can borrow from the 401k, it wouldn’t make sence borrowing from myself when I can barrow somebody elses $ in the form of a mortgage.

If some one really wanted to, they could fold the 401k into an IRA (depending on your employers rules) and then raid the IRA for the wopping $10k. Bottom line it wouldn’t work like I had hoped for me or 90% of the population.

With reguard to the post above. I figure my tax bracket will be 30%+ at 60yrs of age (depending on how well the politicians learn to rape us in 30yrs), just like it is at 29yrs of age. The bonus would be the fact that my $200-$300k that I had in 2008 would be wrapped up into an asset that wasn’t lost in the 2009 recession (obviously I don’t know the dates but the point is valid). I’m thinking home prices will lead the loss, followed by the stock market. Essentially selling high (stock/401k), to buy low (home). I’m a bit worried about loosing my investment like I did in the tech bust.