Early returns indicate the recession is causing more people to take withdrawals from their retirement plans for reasons other than rolling them over to other plans or because they've retired.

Investment manager Vanguard reports the number of workers who borrowed money from their 401(k) plans in the first half increased 6 percent. Nonhardship withdrawals, made by workers 591/2 and older while they are still on the job, rose 14 percent during the same period.

"We speculate that the increase in loans and nonhardship withdrawals is related to the general economic conditions," Vanguard said in a report issued in July.

Hewitt Associates reports loan activity is up 10 percent and hardship withdrawals are up 20 percent this year.

Sandra Pappa of Buck Consultants, Downtown, said she'd heard the same thing from someone who keeps track of a 401(k) plan for the company sponsoring it. The recordkeeper gave her anecdotal evidence of increasing requests for hardship withdrawals and loans.

"When the chips are down and you don't have the income, you have no place else to go," Ms. Pappa said. "If this was a pension plan, participants would not be able to access this money."

It's not surprising that retirement piggy banks are being tapped by more pre-retirement Americans. The unemployment rate is approaching 10 percent, and the recession has added 7.6 million to the ranks of the unemployed. Workers laid off last year, even if they received severance money, may be running out of other ways to make ends meet, Ms. Pappa said.

While it will take time to collect and analyze 2009 data, reports based on 2008 data indicate the recession hadn't caused participants to change their behavior dramatically.

A new Hewitt study revealed that 46 percent of Americans who left their jobs last year cashed out their 401(k) balances instead of rolling them over to IRAs or their new employers' retirement plans. The Lincolnshire, Ill., human resources consultant said that compares with a cash-out rate of 45 percent in a similar 2005 study.

Given the economic distress and job insecurity of many Americans, "It feels like it could have been a lot worse," said Pamela Hess, Hewitt's director of retirement research.

Younger workers and those with smaller balances in their retirement accounts were more likely to pocket their retirement savings despite the tax consequences.

Hewitt's research showed 60 percent of workers between 20 and 29 cashed out their 401(k)s when they left their jobs vs. 43 percent of those ages 40 to 49 and 34 percent of those 50 to 59. The numbers don't distinguish between workers laid off and workers moving on to another job.

Younger workers often switch jobs frequently, never building up a big nest egg until moving on to their next employer. The small balance and the seemingly long distance to retirement makes it easier for them to rationalize pocketing the money, even though the 10 percent penalty on early withdrawals and paying taxes on the withdrawal take a big bite out of their check.

It also has a big impact on how much they ultimately save. A 25-year-old worker who rolls a $5,000 balance into another retirement account will end up with $75,000 by the time he reaches 65 based on 7 percent returns, Ms. Hess said. Cashing out that balance would leave the worker about $3,500 after penalties and taxes, she said.

Hewitt found 25 percent of workers who left jobs transferred their money to IRAs or other retirement plans, and 29 percent kept it in their former employers' 401(k) plans.

Workers cashing out 401(k)s when they leave jobs is the biggest source of leaks from the retirement savings plans, according to a recent General Accountability Office report. The study, based on 2006 data, concluded departing workers took $74 billion out of their retirement plans. Hardship withdrawals and defaults on loans from the plans, the two other major sources of leaks, resulted in $9.6 billion in lost savings, GAO said.

The GAO found the percentage of retirement savers using one of the three methods remained relatively stable compared with studies for 1998 and 2003. Loans were the most frequently used type of nonretirement withdrawal, the agency said. According to Hewitt, about 26 percent of 401(k) participants have loans, while less than 1 percent of participants take hardship withdrawals each year.

Borrowing money from your 401(k) plan is the least damaging of the three because loans have to be repaid with interest, Ms. Pappa said. Loans can be a problem if a worker can't pay off a loan when he changes jobs or loses his job.

Ms. Hess said that while the 2008 data indicates the percentage of departing workers pocketing their 401(k) money remained stable, it also indicates that efforts to educate them about the dangers of doing that haven't had much of an impact.

One way to curb the behavior would be legislation requiring workers to keep their money in their former employers' plans or roll it over into other retirement plans until they reached 591/2.

"They shouldn't be allowed to exit ... just because they change jobs," Ms. Hess said.

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