Borrowing or withdrawing money from your 401(k) plan – If you have a 401(k) plan at work and need some cash, you might be tempted to borrow or withdraw money from it. But keep in mind that the purpose of a 401(k) is to save for retirement. Take money out of it now, and you’ll risk running out of money during retirement. You may also face stiff tax consequences and penalties for withdrawing money before age 59½. Still, if you’re facing a financial emergency—for instance, your child’s college tuition is almost due and your 401(k) is your only source of available funds—borrowing or withdrawing money from your 401(k) may be your only option.