When you're up against the wall, there may be a pot of cash you can't resist: the savings in your 401(k) retirement plan. Your good sense tells you to leave such important money on ice. In a crisis, however, your fingers might reach out. What would tapping those savings cost, and can you put the money back?

There are two ways of draining a 401(k). The first, a "hardship withdrawal," is a terrible choice. You owe income tax on the money you take plus a 10 percent penalty if you're under 59½. A $10,000 withdrawal in the 25 percent bracket nets you just $6,500 (less, if you're also taxed in your state). You can never put that $10,000 back. Years of tax-sheltered savings go down the drain.

These consequences are so harsh that federal law makes withdrawals difficult. You're allowed to take money only for certain reasons, such as paying medical bills, warding off foreclosure or buying a home. (On reflection, you might decide not to house-shop if it means depleting your retirement savings.)

The plan can erect stumbling blocks, too, by demanding proof of financial need. Or you may have to halt your regular 401(k) contributions for six months. That's more money lost, especially if there's an employer match. About 10 percent of the plans don't permit withdrawals, says David Wray, head of the Profit Sharing/401(k) Council of America.

The case against the second choice—taking loans from your 401(k)—isn't as clear. Yes, you should save all that money for retirement—no borrowing to make other investments, add a room to your home or pay off debts. But for true emergencies (medical, say), these loans have charms. You can usually borrow up to half your vested assets, for any purpose, to a maximum of $50,000 (typically, with a $1,000 minimum). There's no credit check, no taxes or penalties apply and repayments are subtracted automatically from your paycheck over five years (up to 20 years on a home loan), forcing you to replenish your plan. Fixed interest rates currently run about 6 percent and you're paying that interest back to your own account.

A 401(k) loan isn't tax-efficient. You repay with after-tax money, which will be taxed again when you draw on your plan for living expenses. You can't tax-deduct the interest if you borrow to buy a house. Less money remains in your account to accumulate tax-deferred. Home-equity loans are a better choice, if you qualify in today's tight credit world.