I'd appreciate pointers to references on how to (or how not to :-) use funds from from one's 401(k) in order to pay education expenses for oneself--particularly, how to incur minimum penalties or other costs. What I mean, why I ask:
I built a fairly large traditional/non-Roth 401(k) at a previous job. I'm currently unemployed, burning through more liquid assets at a slow but steady rate. For various reasons, I'm contemplating getting some additional education in a specialized subfield of my current one. Unfortunately that would cost more than my current savings would allow, but should be within reach if I do one of 2 things, in declining order of precedence:
- cash out my 401(k). Obvious problem here is penalties for early distribution. "I've heard" that one can use 401(k) funds for education purposes, but dunno if this is mere urban legend.
- take on education debt. This has obvious problems; less obvious is the fact that I'm currently completely debt-free and very debt-phobic.
Hence I'd appreciate best references on how to take 401(k) early distribution, and especially references (or just advice, in the absence of specific references on this topic) on how to do so for self-education expenses. (And, yes, I'm aware of the potentially quite harmful effect on my retirement.)