401(k) retirement savings plans and IRAs are long-term investments. They are not meant to be tapped when you’re short of cash. Taking money from your retirement accounts will cost you much more than just the amount withdrawn. You’ll also lose the earnings that might accrue over decades.

Aside from cashing out, here are ways to tap your 401(k) retirement plan at work:

• Borrow against your 401(k). Although you pay interest on the loan, you are actually paying it to your own account.

• Make a hardship withdrawal. A 401(k) may permit hardship withdrawals, but you’ll pay taxes on the money withdrawn and a 10 percent penalty if you’re younger than age 59 ½. A hardship withdrawal is not a loan. Hardship withdrawals are only permitted if you can prove an immediate financial need, such as college expenses, a mortgage, significant medical bills or to avoid eviction. Employers are required to verify your need for a hardship withdrawal and the amount withdrawn can’t be greater than your need.

You can also withdraw money from your IRA before age 59 ½ without a penalty if certain conditions are met such as:

• You’re making the withdrawal to pay for qualified higher education expenses.
• You’re using the money to buy your first home.
• You’re disabled.
• You need to pay certain medical expenses not covered by insurance.
• You’re unemployed and must pay certain health insurance premiums.

With Roth IRAs, you can always withdraw your contributions, not the earnings, without paying taxes or a penalty.

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