The fundamental question is "should I cash out my old 401(k) to pay off student loans?" It would be super nice to not have this payment anymore, but I can't bring myself to actually do it.
I currently have ~$50k in student loans(down from almost $90k, facepunch I now know, but what's done is done and master's degrees are expensive), to which I am paying $1200/month (which is a healthy overpayment) with a plan accelerating principal payments to ultimately have the balance paid in full by the end of 2016. Taking into account the 10% penalty and 28% taxes, my previous employer 401(k) will pay this balance in full (but that's about it...it will net right around $50k). Conventional wisdom says "no way, leave the money to grow", and before I found MMM I would have (and incidentally have IRL) followed this to the letter. Now I am questioning all assumptions, as "conventional wisdom" is for conventional people. I have been reading and researching on MMM (among others) for nearly 2 years now, so I think we are a bit beyond conventional understanding of finances. My wife and I have a solid handle on our expenditures, and are fully aware of the spiraling deathtrap of consumerism, and especially consumer debt, so this move will NOT be used for lifestyle inflation, which I believe is the primary reason why the mainstream stuff says to leave it alone.
The $1200/month is a full 25% of our monthly expenditures, so making this payment disappear would instantly double our savings rate. It would also allow me to restart investing, as it is currently on hold in effort to pay down the SL's (and my new employer doesn't have a 401(k) plan). My wife's 401(k) won't need to be touched for this, and we have lots of springy debt (available credit lines) and a small cash cushion (~$5k) for emergencies should they arise.
So, mustachians, talk me into it (or not, as the thread title suggests). Am I too far ingrained in the conventional wisdom? Or can it be smart for me to take the gains from the recent market run-up, along with the penalty and taxes in order to be free of this anchor and start dollar cost averaging into what could be a coming market correction, or is this me trying to time the market?