Why I may not be able to keep my grubby little hands off my 401k

Golden Idol

You know the opening scene from Raiders of the Lost Ark, where Indiana Jones takes the booby-trapped golden idol from the pedestal and almost gets flattened by a giant boulder?  The golden idol is our 401k and the boulder is what financial advisors tell us will happen to our retirement if we remove it from the pedestal before age 59 and a half.

But, just like Indiana Jones, I’m tempted to take the idol.  I’m tempted to cash out my 401k early even though I know it’s booby-trapped with penalties and taxes.  I’m more and more tempted as it grows bigger and bigger.

You see, my 401k is quickly approaching $100,000 now and I’m not thinking, Awesome! Now the power of compounding will really start to take hold! like I’m supposed to.  I’m thinking, Hmmm, even with the penalties and taxes I can probably stretch that into a couple years of runway for that creative project I’ve always wanted to launch.  I’ve actually done the math… several times.

Now, the $100,000 milestone will hit right around the time I turn 40, so it is entirely possible that this is a mid-life crisis sort of thing.  You know, some men buy convertibles or motorcycles, I launch an ill-advised e-commerce startup from my couch so I don’t have to shave for a while.  But, that’s only part of it.  I fully admit my age has something to do with this, but there is much more behind this.  Here’s why my 401k is not off limits for me:

I’d rather have a short runway than a long landing strip

I really can’t get it out of my mind, this idea that I could do really great things with 2 full years focused on something I’m passionate about.  That’s what makes that little golden idol of a 401k so tempting right now.

Hang with me now.  I’m going to swap metaphors to the one in the headline about the runway and the landing strip.  If you didn’t figure it out already, the runway represents the amount of time our savings would give me and my wife without us having to work 9-to-5 jobs to make ends meet.  The landing strip is a typical golden-years-style retirement.

Now a little about us.  My wife and I are in the middle of paying off the last of our student loan debt.  After that we’re focused on building at least a 2-year runway that doesn’t include our retirement savings, so we have the option to take a break from the rat race and start something new.  It’s a plan that is still about 5 years out.  But, if I do include my 401k (minus penalties and taxes), do some creative mathematics to convince myself, and we really tighten our belts as a family, we are at just about 2 years of runway right now.

On paper we’d be much better off sticking to the 5-year plan, but I wonder if waiting is really best.  This is where the mid-life crisis thinking comes in.  We are not getting any younger.  Will we still have the energy and creative capital 5 years from now?  Will we have the willingness to take the risk for a chance to fly higher on a Concord jet or will we be too comfortable at our current cruising altitude on the Airbus with the long landing strip of our golden years coming into view?  We need a lot of fuel to get a Concord jet off the ground, and most of that will be our own hustle and drive with some seed capital sprinkled in.  Money is really just the runway that buys us time.

Now that I’ve thoroughly butchered that metaphor, I hope you get where I’m coming from.  I want both the runway and the landing strip, but if I had to pick one, I’d take the runway every time.

The abundance mindset

Now to the warm-fuzzy part of our program.  The universe wants you to succeed and provides abundant opportunities for you to do so.

It’s something I learned growing up Lutheran.  I may lose some people here, but it’s the best way I can frame up what the abundance mindset means to me, so bear with me.  Lutherans believe God wants good things for you and you can’t really earn any of it.  It’s offered up free of charge for anyone to take.  All you need to do is genuinely open your heart to it.

You see, it’s not about you seizing that one opportunity in your life and then crushing it.  That puts it all on you, and that’s a hard way to live, constantly worried about whether or not this or that will be my big break and if I screw it up, that’s the end.  We’re addicted to the idea of the one big break, but that’s not how the universe works.  The abundance mindset reframes things so you realize that the universe is on your side.  If you fail at one opportunity, another one, maybe even a completely unexpected one, is right around the corner as long as you open yourself up to the possibilities.  Of course there’s effort involved, but it takes some of the pressure away if you approach life from this angle.

So, what does this have to do with me risking my 401k savings?  Quite simply, if I ever did decide to cash in my 401k savings forge a brave new path, I’ll be firmly locked in an abundance mindset.  I’ll draw comfort in the fact that there’s always more where that came from.  In fact, the world may just open up to me and my family if I can loosen my kung-fu death grip on my money and quit worrying about it so much.

The Jack of all trades back up plan

My dad used to call me a Jack of all trades, master of none.  He never meant it as an insult, but I used to take a little offense to it.  It was hard to see how I would ever be really successful without an intense focus on just one thing.  It’s true though.  I’m good enough at a whole bunch of different things and haven’t really mastered just one to where I really stand out  (Although, I do have to admit, I am really, really good at driving a fork-lift).

The good thing for me, and general population really, is it’s now easier than ever to survive and even thrive as just a Jack of all trades.  In fact, because of outsourcing and automation, it’s actually an asset to have a bunch of random skills.  Technology has made it possible to cobble together a healthy income doing all sorts of things:  freelance writing, running errands for people, selling little pieces of found art on Etsy.  So, that’s my back-up plan.

If I made the leap and cashed in my 401k to make it happen sooner than later, it would be with a clear plan, one thing to focus on.  That’s still the best path to big success.  But, it’s nice to know there’s a plan B through Z to fall back on if things went sideways.

Let’s be clear.  I didn’t write this article to say, cash out of your retirement savings and quit your job immediately to live for now.  I’m not even saying I plan on doing that.  I’m not cavalier about the savings in my 401k and the consequences of cashing it out early.  I just think it’s healthy to keep everything on the table while working to design the best life possible.

I am not an investment advisor.  These are my opinions.  Please do your own research before deciding what to do with your money.  

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  1. I feel the same way and I’m still in my twenties! Conventional wisdom tells me to not touch my 401k and I probably won’t but doesn’t mean I’m tempted! When I read other bloggers who have early retired I’m inspired to crank up the savings rate so I can be out of the game in less time.

    Liked by 1 person

    • Thanks for the comment, Julie! I wish I hadn’t wasted my twenties digging a debt hole. One thing I did do right back then was contribute to a 401k early so there’s even anything to salivate over right now ;). Sounds like you’re well on your way to financial freedom!


  2. Ugh. I have not even started saving in my 401k until I turned 33. My work did not offer it at first (until it did). 4 years later I am at $44k. I am planning to max it out in 2017 (if all goes as planned) and reach $100k by the time I am 40.
    401k is pretty much ‘untachable’ for me. Unless there is an extreme emergency.

    Liked by 1 person

    • That’s not bad at all. You’re definitely catching up to me, fast! 401K is pretty untouchable for me too. The very last thing to touch. But I’m not taking anything off the table if I think it would tip the scales in favor of reaching our ultimate dreams.

      Liked by 1 person

  3. […] The Keep Thrifty Retirement Freedom Calculator clearly shows the true power of compounding gains. If my wife and I contribute nothing after our Retirement Freedom date, if we completely ignore our 401ks and IRAs for 23 years after that date, our retirement accounts should still be fully stashed and ready for when we turn 65 (assuming things stay hunky-dory with the stock market long-term, of course).  We could have $1.6 million sloshing around in our retirement accounts just waiting there for us. Man, am I glad I’ve resisted primal urges to raid those accounts early. […]


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