My wife and I planned to take everything out of my 401k, pay the taxes and penalty, and put all of that towards our rural retreat property and possibly some gold/silver. However I too found out that I couldn't take an early disbursement while still employed.
So after thinking about it some more, we decided to take the max loan from the 401k of $50,000 to use as our down payment on the property... and possibly some other stuff if we have any left over. I have to pay it back through payroll deduction over 5 years at 3.25% interest which goes directly back into my 401k.
I did find out that if I lose or quit my job I can then take the outstanding balance of the loan... and any other balance in the 401k... as an early distribution at that time and pay the taxes + penalty.
The taxes and penalty on an early distribution would take 45+% of what I've saved, so it's quite a hit. Then again, if I'm able to covert the other ~50% into property, precious metals, or other prepping stuff then it's probably worth it given what's on the horizon.
Our family's journey from the Rocket City to the Redoubt: www.suburbiatosimplicity.com