ok recent few months, i have done pretty good using fund in my 401k account. Now if I continue with the stellar performance, i am considering this: i have an outstanding loan amount of about 30K$. Total remaining is about 70K$ which I made last few months add'l 20K-30K$ i believe. Lets say next few years, I managed to make another 40-50K$ totalling gain of about 60K-90K$, bringing net gain of ~100%. So instead of grueling monthly payment of 30K$, I am considering to do a early withdrawal about close to 30k$ (i am aware of 10% of penalty + income tax) and then use it to pay it off. I can live with this steep penalty as long as if I have made a steep gain through investing mentioned herein above.
Do some math on your return on the 401(K) - does your firm allow loans from the 401(K)? Let's say your trading can earn X% - you sacrifice that + the 10% penalty + paying the tax now. Sounds like a bad idea. If you really need the money badly look at taking a loan from the 401(K). Assuming tax rates don't change between now and you expected retirement just do the math, but taking an early withdrawal sounds like a really poor choice, but do the math.
How old are you? In general, unless you need the money to eat, I would never cash in a 401K early. Just trade in the 401K.
If I cash out $30,000 from my 401k and I am 20 years from retirement, at 8% growth I will have $139,828.71 less at retirement. Not a good deal.