401(k) plans are in reverse right now. No, Clark's not talking about that massive decline in your quarterly statement. That's simply the give and take of stock investments. Hopefully you're continuing to contribute to your plan. That will soften the blow by allowing you to buy more shares at a lower price.

The reversal Clark's talking about has to do with people trying to put out fires by turning to their 401(k) accounts as piggybanks. Merrill Lynch reports a 23% increase in 401(k) withdrawals year over year. Great-West Retirement Services, meanwhile, has seen a 20% rise in hardship withdrawals when people are facing foreclosure.

People often ask Clark if it's wise to avert foreclosure by dipping into their retirement savings. He usually recommends against this action. As strange as it sounds, sometimes the best option is foreclosure. Think about it: If you wipe out your 401(k) to avert foreclosure and then 6 months later you face it again, well, you haven't really solved the problem. You've just made things worse. You've cleaned out your retirement savings and you'll owe massive taxes and penalties of about 40% when you do next year's taxes. And you may not be able to avoid foreclosure a second time. So then you'll have no home, no retirement savings and you'll owe a great deal of taxes.

Clark's advice is slightly different if you're just getting back on your feet after a layoff or a medical issue. A 401(k) loan may make the most sense if you'll again be able to service the mortgage comfortably in the near future. But if you're barely keeping your head above water, a hardship withdrawal makes no sense. So if you're trying to catch up on an adjustable-rate mortgage; if you face a ballooning balance because of an option payment loan; or if you bought at market peak, you might be better off letting the home go. Finally, don't ever let a medical bill collector intimidate you into doing a hardship withdrawal. A 401(k) is not a piggybank to be raided; it's there to fund your retirement.