Sometimes you don’t have a choice as people lose jobs and other issues arise. However, it should truly be your last resort to tap your 401k for the emergency funds you need. A tax saving idea would be to obtain an home equity loan where you have the ability to write off the associated interest payments. One risk, however, would be if the market were to collapse and you owe more than the house is worth. So be careful and remember, anything you can do to preserve your 401k will reap you healthy rewards when it comes to retirement, not to mention you have compound interest working for you.