Conventional wisdom tells us that retirement money is for retirement. Should one decide that funds set aside for retirement must be used today, however, there are certain penalty-free tricks to drawing on both IRA and 401(k) funds. The Internal Revenue Service (IRS) generally does not allow access to retirement accounts until a person has reached 59 1/2. If participants yank money out of a government-recognized retirement account, they incur both federal and state taxes. Participants can get at their 401(k) money, however, via a loan or hardship withdrawal. As no penalties are incurred with a loan, it is usually the preferred alternative. IRS rules allow 401(k) participants to borrow as much as half of the value of their 401(k) plan, or $50,000--whichever is smaller. Typically paid back through payroll deduction, an employee can repay the money over a period of five years. In order to receive more money than a loan will allow, the only other option is a hardship withdrawal. The IRS has a number of rules that regulate hardship withdrawals. Designed to meet immediate financial needs, hardship withdrawals require the termination of the 401(k) plan. Although IRAs permit withdrawals at any time, doing so incurs penalties and taxes. Early IRA withdrawal penalties can be waived for disabilities expected to last for the rest of a saver's life. In addition, penalties can be waived for substantial medical expenses, an unemployed person's medical insurance, a first-time home purchase, or higher-education expenses.