NEW YORK — People hard up for cash — whether they've been set back by a job loss or a disaster like Hurricane Katrina — may be tempted to tap their 401(k) accounts and other company-sponsored retirement plans. But this should be a last resort, not only because they face possible penalties but also because it undercuts their long-term security.

"This money is going to determine how you live in the long run," said David Wray, president of the Profit Sharing/401(k) Council of America, based in Chicago. "So if you can deal with short-term emergencies out of short-term resources, that's a better planning approach."

Better options for raising cash in an emergency include borrowing from relatives and friends, tapping a home equity line of credit or seeking a personal loan from a bank or credit union, experts say.

Company 401(k)s and other retirement accounts are inviting targets because in many cases they represent a worker's biggest pool of savings, and most company plans allow for loans or "hardship" withdrawals. But because these accounts are funded with pretax income and grow tax-deferred, there are penalties if they're tapped early — before a worker turns 59 1/2.

Wray said that if a retirement account is a desperate family's only possible source of emergency cash, it first should consider borrowing, rather than withdrawing, from the account.

"You can borrow up to half the account balance or $50,000, whichever is less," Wray said. "But if you borrow, you have to repay, typically through a payroll deduction."

Those payments are due at least quarterly, and they include interest, generally set at a percentage point over the prime rate, which currently is 6.5 percent. The interest goes back into the account.

Workers who choose the other alternative, hardship withdrawals, won't get nearly as much money as they hope. Companies withhold 20 percent of the amount withdrawn and forward it to the government to help cover the taxes. That amount, Wray said, probably won't fully cover the taxes and the 10 percent penalty, so the worker will owe still more.

There have been proposals in Congress to waive the penalty and allow the taxes to be paid over several years if the withdrawals are used to reconstruct homes damaged or destroyed by Katrina, but it's not yet clear if they will be enacted.

Meanwhile, some Katrina victims will be eligible for grants from the Federal Emergency Management Agency, which is responsible for coordinating recovery activities, or from insurance policies that cover temporary living expenses when homes are damaged by storms.

But there are other alternatives consumers can look to for cash.

Stephen Brobeck, executive director of the nonprofit Consumer Federation of America in Washington, D.C., suggests families work on two fronts — raising money and calling on creditors to defer payments on bills.

"If you ask for understanding and relief from credit card companies and mortgage companies, the cash you raise will go farther," Brobeck said.

He said families should seek loans from relatives and friends who are likely to be generous when there's been a disaster.