As people lose their jobs due to the economy, more people have started to take money out of 401(k) plans and individual retirement accounts to make ends meet, says Greg Stewart-Longhurst, certified public accountant and founder of Stewart & Associates PS.

"Many times, it doesn't help them financially, it just decimates their retirement money," he says.

A 2012 study released by Transamerica Center for Retirement Studies supports Stewart-Longhurst's belief. The study says that only 10 percent of displaced workers are very confident in their ability to retire comfortably.

The Transamerica Center found that a little over one-third of respondents to the survey have withdrawn funds from a retirement account. Of that group, 45 percent said they had withdrawn funds from a 401(k) retirement plan.

Mark G. Powers, president of Spokane's NAS Pension Consulting Inc., echoes Stewart-Longhurst, saying that the shifting economy creates a need that people are choosing to meet through retirement accounts. This is funding that for many could be their only available source of savings.

"It's a worse problem now with higher unemployment," Powers says. "If you're without money and there's some there by just signing your name, it's hard to stay away from that money."

NAS Pension Consulting, located at 1325 W. First in the Eldridge Building downtown, helps companies with fewer than 500 employees design retirement programs. The consulting business has about 300 clients.

Powers says when a person loses his or her job, typically they are given the option of keeping money in the 401(k) or withdrawing it. This choice means some will decimate the account rather than transferring it to a new retirement account.

"A lot of people have the chance to roll that into an IRA, and instead of that, they're taking the cash," says Stewart-Longhurst, whose office is at 1113 E. Westview Court, on Spokane's North Side.

A 401(k) plan is set up by an employer while an IRA is set up by the individual. Powers says employers can determine whether their employees will have the option of accessing the 401(k) after leaving their job, but says most don't require employees to keep the money in the 401(k).

He says only a small number of his company's 300 clients actually regulate employee retirement accounts, barring individuals from tapping into their accounts until they reach retirement age. A vast majority leave the decision up to their employees.

"I think the government encourages employees to leave their money in retirement plans when they switch jobs, but they do that through a penalty system," Powers says.

Pre-tax money is invested in a 401(k). Consequently, income tax is charged upon withdrawal, regardless of whether it's taken early. The Internal Revenue Service places an additional 10 percent tax on early distribution of funds from a 401(k) plan or IRA plan if withdrawn before a person is 59 1/2. There are exceptions to this rule, however, in cases where a plan holder becomes disabled or needs money to pay medical bills. A beneficiary of a deceased individual's plan isn't penalized either.

Money deposited into a retirement account isn't taxed until it is distributed to a person later on. Powers says that is potentially one positive for those withdrawing early, since there is a chance they will be in a lower tax bracket now than they will be later on, meaning more of the money would end up in their pocket as the income tax assessed on the value withdrawn would likely be lower.

He says he thinks the government uses penalties as a way to regulate and discourage people from dipping into those accounts when they hit a rough patch, but he says he feels this equates to kicking people when they're down.

"That's not a strong enough disincentive for most people to draw that money," Powers says.

It's possible to take out a loan from a 401(k) without any sort of penalty, as long as the loan is paid back within a five-year period. If the loan extends beyond five years, it defaults to taxable income and the 10 percent penalty is assessed.

Borrowers can take a loan for half of the amount in a retirement account up to $50,000. Powers says this option is more common for people who are still employed.

"For the most part, people will take a loan rather than a taxable distribution because it avoids the tax and the penalty, but they have to pay it back," he says.

Most plans have what's known as a due-on-termination provision, which means the loan is due immediately, or it becomes taxable income. Powers says rarely plans will allow the borrower to continue to pay on the loan after leaving the workplace.

He says when people leave their jobs, they typically are made aware of the tax ramifications of withdrawing from their 401(k). Although documents used to explain these penalties usually are written in layman's terms, people can be intimidated by the breadth of these documents, which he says can be several pages in length. There's a chance people will ignore the warnings and withdraw the money anyway, Powers says.

"Participants have always had access to this money, and when they're changing jobs, I think it's common that they wouldn't draw their money out," Powers says. "But if they're losing their job, then they are going to draw their money out, and the future is going to suffer for them because they aren't going to have a retirement account."

The Transamerica Center for Retirement Studies says of those interviewed for the survey, displaced middle-aged workers have taken the hardest hit. For those in their 40s and 50s, the median household savings in retirement accounts was $2,300, compared with $10,000 for those in their 20s and 30s. The center says those older workers have a harder time finding new employment, and once they do, they have less time to rebuild their retirement account compared with younger people. People in their 60s or older had the highest median retirement savings amount, at $47,000.

According to the Investment Company Institute, for 2011, 46.1 million households in the U.S. owned at least one type of IRA. This number is down from 48.6 million in 2010, but the institute says that number had been rising over the last decade.

Powers says the economy also has had an adverse effect on employer contributions to 401(k) plans. The poor economic climate has led to a dip in the amount of employers' matching contribution to retirement accounts over the last few years, but he says those matching commitments have started to rebound.

Although the exact details of a 401(k) plan are left up to the employer, typically an employer will match all or a certain percentage of the contribution made to a plan by an employee.

"They definitely dipped for a number of employers," Powers says. "For most of ours it didn't, but nationwide, the matching definitely went down."