Should I Withdraw My 401K To Fund My First Deal?

[Joe Giovatto]

Hey everyone! I'm hoping for some advice as I look start my real estate journey. A bit of background - I'm 28 years old, and have been contributing to my 401K for the last 5 years. Thanks to all the great information on BP, I'm realizing I'd rather use that money to jumpstart my first deal. I currently have $45,000 invested in my 401K, and I contribute $600 (pre-tax) monthly.

Knowing I'll incur a 10% early withdrawal penalty, and will need to pay income tax on that money - should I withdraw the $45,000 to put toward my first deal? As I see it, my two options are:

1. Leave the money in my 401K, and cease all future contributions. Save for 1-2 years until I have enough to put toward my first deal.
2. Withdraw the money and get started now. Getting a 1-2 year head start will accelerate my plans, and house hacking will still allow me save over that period.

Knowing that $45,000 in a 401K will steadily grow if left untouched, is it better to withdraw or save at this stage?