I have 78,000.00 in my 401k and I'm getting laid off without any severance. I've got 19k in debt. Would it make sense to take a distribution and suck up the 10% fee and taxes to pay off the debt?

First - I'm not an accountant or financial advisor - I'm just someone who's had my share of debt issues.

If I were in your situation, I would be asking myself the following questions:
1) once I'm laid off, where is my next income coming from (i.e. do I have another job?)
2) what's in my savings account?
3) how much do I need to live per month?

It sounds like your first priority is to make sure you have a new job and income and can support yourself - getting rid of the debt might be second priority.

You didn't say what kind of debt it is - if it's a 401k loan, then you might not have another choice. If it's any other kind of debt, then why not (continue?) to make regular monthly payments on it? If you can do that, it probably makes more sense than a 401k distribution...

... but then again, I'm not a financial advisor or accountant. :)

-Adeena

Four words:

DO NOT DO IT!

The tax bite will destroy you. Leave your 401K alone or roll it over into a rollover IRA.

Pay the minimum balance on the credit card debt while you look for another job.

Once you have another job, then work to set up a budget to deal with the $19K in debt.

Leave the 401K/IRA money for your retirement. That is WHY you set it up to begin with!