Americans are raiding their already fragile retirement accounts to get through financial hardships, such as unemployment, medical emergencies and buying a home.

And they are doing it even though borrowing a modest $5,000 can dramatically erode savings over time, according to a study released by the Center for American Progress.

The study found that workers in 2004 had $31 billion in outstanding 401 (k) loans, a fivefold increase from $6 billion in 1989. Between 1998 and 2004, an average of 12% of families with 401(k) plans borrowed from them.

As economic conditions grow bleaker, the number of people dipping into retirement money will only rise.

A $5,000 loan, for example, could cut retirement savings 22% even if the loan is repaid without penalty, accounting to the study. That is assuming the person has a $40,000 salary and is five years into a 38-year career.

One reason people are increasingly using 401(k) plans as a crutch is because they are so easy to access compared with pensions and IRAs.

The borrower acts like a bank to himself.

Typically, borrowers can repay loans within five years without penalty. Loans for first -time homes must be repaid within 15 years to avoid penalties.

That does not mean people are raiding savings to go on shopping sprees. Middleclass families in particular are turning to retirement money to get through financial crises such as unemployment and medical emergencies, the study found.

People typically can borrow half the vested balance of their 401 (k) accounts, typically at a high interest rate. Lessening the blow, however, is that workers pay the interest back into their own accounts.

Failing to repay loans on time typically incurs a 10% excise tax, and borrowers also must pay income tax on the amount withdrawn.