rocking-chair.jpgThere’s a disturbing trend going on in the U.S. workplace — more and more employees are raiding their 401(k) plans for a quick buck.

Here are some numbers on the uptick from the Wall Street Journal today:

Eighteen percent of workers had a loan outstanding from their retirement plan in 2007, up from 11% in 2006, according to a survey to be released today by the Transamerica Center for Retirement Studies, a nonprofit corporation funded by Aegon NV’s Transamerica Life Insurance Co.

Major retirement-plan providers are reporting a similar trend. The number of participants taking a loan from their 401(k) plans rose by 7% at the end of last year from six months earlier, according to J.P. Morgan Chase & Co.’s analysis of 350 plans nationwide that cover 1.3 million people. Those results followed a period from January 2005 through June 2007 when loans from these 401(k) plans fell by 15%.

There are a host of reasons for why you guys are tapping into your retirement plans, everything from the housing crunch to consumers loaded with too much debt. But cashing out, even a bit of money, can come back to haunt you.

In today’s who-knows-what-the-heck-will-happen economy, you could loose your job tomorrow, or realize you should changes jobs for whatever reason. That means you’ll have to pay back what you took out of the 401(k) in full or risk major penalties.

I know times are tough for many of us, but robbing Peter to pay Paul is never a good idea. It seems like easy cash because you don’t have to beg a bank for money or further max out credit cards, but this money is for your retirement, which unfortunately comes faster than any of us can imagine.

This is a great time to scale back spending, get on a budget and downsize your life.

Maybe it’s time to sit down with your boss and ask for that raise you deserve. Or maybe you should consider looking for another gig, which is how workers typically end up boosting their earnings significantly. Looking for a quick fix, which is your retirement savings, could spell doom. People, this is a temporary Band-aid, and it’s going to hurt when you have to rip it off.

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