I'm 30years old and I am going to be going back to college in the fall. Financing is really tight, and monthly bills are my biggest concern. I have around 20,000 in my 401k right now, and I'm going to be leaving my job around early August.

I'm very confused about 401k's, and how/when you can withdraw. I do understand the penalties and taxes associated with withdrawing. I'm looking at the possibility of taking everything and using it to pay off my car (around 7k left) to reduce my monthly bill level, and also using the remainder as a savings account to help pay tuition for future semesters (around 3k a semester).

I'm also a little confused on what happens to your 401k if you leave a job. There is also a high chance that I might be laid off (construction industry) before I leave on my own in August. I'm not sure how this would effect anything.

I know generally it's not at all a good idea, and that you would make more money over the timeframe by not withdrawing. I'm fairly young and very committed to having a good retirement future, but I could very much use this money more at the present.

Is this a terrible idea? Any better solutions? I'd like to be knowledgeable if/when I talk to the plan administrator at my company.