Cash Out retirement fund!! Is it stupid for me??

[Chris C.]

This flies in the face of everything that we have ever learned about retirement accounts.  So I want to start this by stating that it is stupid for 99% of the people out there to cash out retirement accounts but I would like feedback on my situation.

Brief update on my situation:

1. I plan on retiring from my full time job in June of 2020/ Cash Flow will be very important
2. I am 44 years old
3. I will be living off my rental, fix and flip income, and other real estate related activities
4. My company is freezing our pensions effective June 30th 2019.  We have the option of rolling over this pension or cashing it out.

My thought is to cash out my 401k and pension and payoff as much real estate related financing as I can with the funds left after taxes and penalties.  This will accomplish the following.

1. Increase monthly cash flow by $1800
2. After paying 10% penalty I will save $4400 over what I would pay in interest in 2 years / In other words, interest savings more than pay the penalty
3. In my opinion the taxes are a wash as I would have to pay those now or when I retire.

There you go,  please poke holes in this plan and tell me what I am not considering.