A substantial retirement account is a worthy goal. That’s why the government subsidizes these accounts through a variety of tax incentives. But taking money out of your account before retirement can cost you in two ways: tax penalties and lost growth.

Still, there may come a time when you’re tempted to spend your retirement funds before your working years are over. If that time ever arrives for you, remember this: one of the golden rules of retirement planning is leave your funds untouched.

So, take time now to learn more about the consequences of early withdrawals—it may help you be less tempted to stray from your intended course.

Loans may be possible…but not advised
Some people believe that taking a loan from their retirement program costs less than a bank loan. While the interest rate you pay may be comparable or even lower, there are other factors to consider. The borrowed money you repay earns only the fixed-interest charged on the loan. Those earnings may not match the returns you would have earned from the program’s investments if you left the money in your account. Remember that this lost growth is part of the overall cost of the loan. When you calculate it this way, a loan from your retirement account could be far more costly than from another source.

Another potential drawback: With most retirement programs, you must keep your job to keep the loan. If you quit or get laid off, you may have to repay the entire loan within three months—just when you may be least able to afford it. If you default, the federal tax law treats the unpaid balance as a withdrawal.

Hardship withdrawals or unforeseen emergency withdrawals should be a last resort
Depending on the specific provisions of your program, you may be able to take hardship withdrawals to prevent foreclosure or eviction from your home, for health emergencies with un-reimbursed medical expenses, and in certain other specific circumstances. But when you consider that you may have to pay a 10 percent federal income tax penalty for early withdrawal (if you’re under 59 ½ years old) plus lose out on the potential growth, you should seriously consider other options first.