Excerpt: In its early days, prematurely tapping into the tax-deferred savings plan could only be done for special purchases, such as for a down payment on a home. For financial relief, many consumers would use home-equity loans and other forms of credit, leaving 401(k)s to accumulate money for retirement. But now, with home values falling and credit drying up for many consumers, 401(k) plans are being raided with greater frequency to pay medical bills and credit-card debt, avert home foreclosures and other big-ticket problems, and even pay for day-to-day expenses, such as groceries.

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