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For many Arkansans, these tough economic times are forcing them to take drastic economic measures.

With the price of gas and groceries up and home sales down, there's a nationwide spike in the number of people tapping into retirement, and it's a trend that is being seen in Arkansas.

For many, a 401K is our main retirement plan, now, more and more people are borrowing from that savings.

As Americans battle the on-going mortgage meltdown, relentless pain at the pump, soaring grocery prices, and a failing market, it's no wonder many are forced to cash in money they'd been saving for retirement.

Dennis DeCoursey's company, Werntz and Associates, manages retirement plans for 240 employers in Arkansas and surrounding states.

So far this year, he's seen the number of people borrowing from their 401K plans double from 2007. The number taking out hardship withdrawals tripled. DeCoursey blames the tough times.

(Dennis DeCoursey, Werntz and Associates) "It's particularly tough on employees at the lower end of the pay scale trying to do what's right and participate in the 401K  plans."

For some, borrowing money from themselves is the only option. Though it has to be repaid with interest, DeCoursey says it could be worse.

(DeCoursey) "A loan is really not that bad a deal if you're paying back interest, you're not paying someone else interest."

Of course, if you leave your job, the money has to be paid back immediately. The other option, a hardship withdrawal, doesn't have to be paid back, but is considered a last resort for extreme need, like avoiding foreclosure, or paying funeral costs.

It can be taxable. Another penalty is that you can't contribute to your plan for 6 months after the withdrawal, and that money won't be their for retirement.

(DeCoursey) "So, it's really not a good deal. If there's another way to do it, they should explore those options."

Bottom line, if you're thinking of tapping into your hard-earned nest-egg, DeCoursey says carefully weigh the consequences.

(DeCoursey) "If they're nervous about it, they should probably talk to who's responsible for it and get guidance."

Most employers have an administrator to help with those questions, and check, because plans may vary.

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