KNOXVILLE, Tenn. (WVLT) -- A record number of people are borrowing against their 401K. But if you are thinking about dipping into your retirement, financial experts think you better think twice.

"The greatest concern is that we are taking away from our future retirement security to try to patch and mend our current financial crisis," said Paul Fain, a certified financial planner and president of Asset Planning Corporation.

"They really need to understand the penalties, the issues, and what it's really going to cost them to borrow against that retirement savings," said Daru Burdge, president of CredAbility.

Experts explain two ways people can cash out their retirement savings. A financial hardship withdrawal from your 401K requires specific criteria, but money taken out is not repaid.

If you were to take $10,000 out, you'd only net about $6,500 after paying income tax and a 10 percent penalty, if under age 59 1/2.

If you borrowed the $10,000 from your 401K, you'd have to pay it back plus interest. The rate is set, usually the prime plus 1 or 2 percent, paid over a set period, usually five years.

"Then they are paid back out of your paycheck so it's money taken right out of your pay," said Fain. You are essentially, paying yourself back experts explain. But while the money is out: "You lose all the growth you would have had with it sitting in that retirement account."

Another risk to a 401K loan: If you quit your job or get fired, you'll usually be required to pay the loan back within 60 days of you'll be subject to withdrawal taxes and penalties.

Certified financial planner Paul Fain says desperate times call for such decisions, but, "I would call invading my 401K the last resort."

"What people are saying when they take out that loan is I'm willing to work longer," he said.

Daru Burdge says CredAbility's own survey showed even after borrowing, the fix doesn't stick. "What we find is, even after people do tap into those, that resource, they are still in trouble. It's a very temporary fix."

Before tapping into your retirement, Burdge suggests considering a home equity loan, or a formal loan from friends or family.

If you discover a budget woe in enough time, she says temporarily discontinuing a monthly retirement savings plan is much better than borrowing against the money once it's already set aside.