http://news.yahoo.com/s/ap/20080716/ap_on_bi_ge/raiding_retirementWorkers break retirement piggy bank in tight times By CANDICE CHOI, AP Business Writer
Wed Jul 16, 11:01 AM ET
NEW YORK - Americans are raiding their already fragile retirement piggy banks to weather financial hardships such as unemployment, medical emergencies and buying a home.
And they're doing it even though borrowing a modest $5,000 can dramatically erode savings over time, according to a study released Wednesday by the Center for American Progress.
The study found workers in 2004 had $31 billion in outstanding 401(k) loans, a fivefold increase from $6 billion in 1989. Between 1998 and 2004, an average of 12 percent of families with 401(k) plans borrowed from them.
"They don't necessarily pay penalties. But the penalty is that they have fewer retirement savings," said Christian Weller, an author of the study.
As economic conditions grow bleaker, the number of people dipping into retirement money will only rise, he added.