Cons: You can cash out only if you're leaving your job or the plan is getting dissolved. Assuming you're younger than 591/2, you'll fork over a 10% penalty to the IRS, plus get whacked for the taxes due on all earnings and pretax contributions. If you're in the 25% bracket, that means 35% of whatever you had in the plan will vanish. If there are state taxes too, you could lose 50% of what you'd saved, according to Michael Eisenberg, a C.P.A. and president of Eisenberg Financial Advisors in Los Angeles. Bottom line, he says: "You'd need to be desperate to do this."
NEXT: Go to a payday lender