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[quote=Anonymous][quote=Anonymous][quote=Anonymous]
It is &quot;moronic&quot; because retirement is not savings.  Retirement is retirement.  You would withdraw [b]&gt;50%[/b] of your [b]retirement savings[/b] to use for the downpayment.
You should be able to afford such a house on your income, assuming that you save for a downpayment.  But you have not so saved.  Instead, you intend to raid most of your retirement account.  Not savings, retirement.  
You have $50K for a downpayment.  Not $170K.  Therefore you cannot afford the house.
How old are you?  $80K isn't much to have in a retirement account, whether you are 31 or 39.[/quote]
So retirement savings is an improper term...
You didn't read well, or I didn't express myself well.  Besides the 401K, we have two defined-benefits generous pension plans, which we won't (can't) touch.  If we don't touch the 401K, it will provide just under a third of retirement income from retirement accounts (excluding SS, which obviously is minimal).  So I would withdraw not one-half but one-sixth of our retirement savings to do something that we highly value:  a smallish outdated affordable home that works perfectly for our school/work commute.  By the way, right now I have $200K in that 401K. (By the way, a hardship withdrawal incurs the 10% tax penalty, but not the 20% withholding penalty.)
We can agree to disagree: you say that I cannot use that money, which bears my name and which I can easily access.  I say I shouldn't do it if possible, but given the circumstances I will consider doing it to fulfill an important life goal.  That said, I do thank you for your time providing your insight.[/quote]

Look, if you think it's a good idea to withdraw retirement funds, and incur a penalty in doing so, to make a down payment on a house because you cannot save for that down payment independently of retirement, ultimately that is your business.  It doesn't matter whether I "agree" as it is your decision.

But you did ask here, and many of us said it is a very stupid idea.  And you will not find a financial adviser anywhere who will agree with you that it is a reasonable thing to do.

But whatever, make whatever stupid decisions you want with your own money.[/quote]

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