Paying Down Debt Vs Saving

How much is the student loan debt? Personally, I would take the guaranteed 5.6% return.

I'm actually in a similar situation with one of my rental properties and have decided just to pay it off this week.

Selling your 401k now would be a terrible idea. You haven't lost any real money; it's paper loss. The number of shares you have are still the same. Unless u sold your funds to cash, which is just as bad.

Buy low, sell high. Not sell low, buy high.... If you have 10+ years to retirement you should really welcome these downturns. This lets you buy more shares per dollar. As long as you're up at the end the short term means nothing.

If you really must, either reduce or stop your 401k contributions for now, but leave the funds in place to give them a chance to recover and grow. Though you need do at least the minimum for the company match as that is free money.

Definitely do not pull anything out of the 401, doing that before retirement involves paying steep penalties. Besides, next year it may gain everything back and then some, you never know. That's the thing about investing, sometimes you lose and sometimes you win, you simply have to take a long-term view.

5.6% interest is kind of a breakeven point IMHO. I suspect you could go either way, meaning either stop further 401 contributions and focus on the loan, or continue min payments on the loan while you keep investing in the 401. I lean toward the former since reducing your loan payments will help if you want to buy a house.

But definitely do not pull money out of your 401 due to the penalties. If you're going to focus on cutting debt then cut your current 401 contributions and use the extra cash. If you are getting a company match, that comes first since it is free money, don't cut below that amount.

Example: If you are getting a company match on your first 3%, then contribute 3% before knocking out student loans. If you aren't getting a match at all, consider finding a new employer but until then feel free to go ahead and knock out the loans. But do not withdraw what you've already put in.

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I'm currently losing money monthly in 401k & Stocks.

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I wouldn't think about it like that. I would consider this the magic of dollar cost averaging.

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I almost feel like I should pull out and focus on cleaning out debt and then re-focusing on saving?

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I would definitely balance out saving versus debt reduction. You can't replace time in the market, but you also cannot lose money on interest you don't pay on money you don't owe.

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The amount of interest I'd save versus make seems to far outweigh it, if I can pay off quickly (IE next 3 years)

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FWIW, financial guru Dave Ramsey pushes this exact philosophy - paying off the debt on everything (except the mortgage on the primary residence) to the exclusion of all savings beyond a $1000 emergency fund.

There is a tax advantage to contributing to a 401K

You can also get a deduction on student loan interest

I'd take that into consideration before you start throwing everything you have at the student loans and neglecting your 401K contributions.