The 401K administrators wouldn't allow this scheme of yours to be feasible. When you open a 401K account and start contributing to it, you can't just keep withdrawing from it at regular intervals like you suggest. At most you can make a one time loan against a balance that exists in your account if you want to keep using the account without closing it. You have to pay this loan amount back with interest--you're paying yourself back with interest, but still when you're in poverty paying anything back in excess of what you started out with is just another hardship.
If you opt to take a loan against your 401K, then you will be required to re-pay back the loaned amount through regular paycheck deductions until it is paid back, and you aren't permitted to take another loan until this first loan is repaid in full. Furthermore, a number of 401K plans that have employer matching typically have some form vesting requirements before those funds can be accessed; often a year or more.
Regardless, in this scheme withdrawing any amount (i.e. making a loan and not repaying that loan, or withdrawing funds and closing the account) will end up losing her money in the end given that McDonald's is only matching up to 7% while withdrawing early from the account incurs a mandatory 10% early withdrawal fee that 401K administrators are required to levy and report to the IRS.
If you opt to take a loan against your 401K, then you will be required to re-pay back the loaned amount through regular paycheck deductions until it is paid back, and you aren't permitted to take another loan until this first loan is repaid in full. Furthermore, a number of 401K plans that have employer matching typically have some form vesting requirements before those funds can be accessed; often a year or more.
Regardless, in this scheme withdrawing any amount (i.e. making a loan and not repaying that loan, or withdrawing funds and closing the account) will end up losing her money in the end given that McDonald's is only matching up to 7% while withdrawing early from the account incurs a mandatory 10% early withdrawal fee that 401K administrators are required to levy and report to the IRS.