Taking loans and withdrawals from 401(k) accounts may have a significant impact on overall retirement success. The top chart shows that employees who take loans and withdrawals from their 401(k) accounts may end up with significantly lower balances in the end. This is due to skipping contributions and missing the company match when paying back their loans as can be seen in the bottom chart. Having an emergency reserve and savings outside of a 401(k) can help avoid tapping the retirement accounts for liquidity. However, if the employee must borrow, continuing to contribute while paying back the loan may mitigate the negative impact of the loan.