Workers across all income levels are borrowing money from their retirement plans, according to data compiled by JPMorgan Asset Management.

The trend represents a big problem, Nasdaq contributor Maurie Backman from Motley Fool wrote in a recent piece on retirement planning.

“Borrowing against a retirement plan is risky, and if you’re not careful, you could wind up getting hurt financially,” Backman wrote.

401(k) plans allow workers to take out a loan on savings, usually the lesser of $50,000 or 50 percent of the vested balance in an individual’s plan. Backman noted some plans allow the saver to borrow up to $10,000 even if the amount surpasses the vested amount.

Plan participants generally have five years to repay the loan.

“What is terrible, however, is that if you fail to repay your loan on time, it will be treated by the IRS as an early withdrawal, and that means you’ll be subject to a 10 percent penalty for removing funds from your 401(k) prematurely, assuming you haven’t yet reached the age of 59-1/2,” Backman continued. “Another thing: If you lose your job while you’re in the process of repaying a 401(k) loan, you’ll usually get just 90 days from that point to replenish those funds.”

Failure to do so would incur the 10 percent penalty.

IRA rollovers — the method employed to borrow from an IRA — present their own catches.

“Do a direct rollover (and) you never see that money yourself; it lands in your new account automatically,” the piece noted. “With an indirect rollover, however, you get a check for the funds you’ve moving, and it’s on you to get them deposited into your new account within 60 days.

“Fail to do so, and the amount you roll over will be treated as an early withdrawal, which means you face the aforementioned 10% penalty if you’re not yet 59 1/2.”

The 60-day window for repayment typically is not the most viable solution for borrowing.

“The purpose of socking funds away in an IRA or 401(k) is to have that money available to you in retirement,” Backman said. “If you borrow against your nest egg and can’t pay it back, you’ll not only be penalized, but also, you’ll have less money on hand during your golden years, when you need it the most.

“And that by itself is a good enough reason to leave your long-term savings alone, and find other ways to access cash when you need it.”

He offered home equity loans or personal loans as better alternatives.

Finally, Backman said workers also must maximize Social Security benefits to ensure financial confidence at retirement age.