NEW YORK -- A new debit card from Reserve Solutions Inc. allows consumers to use ATMs to pull out funds from their 401(k) plans, the Washington Times reports. Financial planners are sharply critical of the ReservePlus card, which already has 10,000 cardholders

ReservePlus cardholders can withdraw loans from their employer-sponsored 401(k) retirement funds, which normally advise people from taking out money before reaching 59½ years old because of early withdrawal taxes and fees. Pulling out those funds early and failing to replace the money quickly could result in account holders losing their retirement money.

“For every $10 you take out of the account, you only have $6 or $7 to spend, probably closer to $6, which means you’re giving up a third of your money,” Stuart Ritter, certified financial planner for T. Rowe Price, told the newspaper. “You’re also giving up money to spend in retirement, so you are by definition lowering your lifestyle in retirement.”

Financial planners say that the current economic slowdown and subprime mortgage crisis has limited many people’s access to credit, and financial troubles are driving them to tap into their retirement accounts. “We have seen an increase in loans, and we have seen an increase in hardship withdrawals from 401(k)s,” Ritter added.

Reserve Solutions officials point out that the ReservePlus card does not create more danger to retirement money than any other 401(k) plan loan. The card “provides a loan line within the plan trust, making funds available as needs arise, eliminating excessive, premature borrowing,” the company says on its Web site.

Previously, workers have been able to get loans against their 401(k) accounts but not with ATM cards. With the ReservePlus program, employees can transfer accepted loans into online, interest-earning accounts. Then, workers can get cash from the account via ATMs, up to the maximum amount set by their employers. The debit cards also can be used to purchase goods and services.

“The need for individuals to save for retirement has grown over the year due to the uncertainty of Social Security, the shift away from pension plans and the increasing cost of health care,” Jennifer Engle, spokeswoman for Fidelity Investments, told the newspaper. “Retirement vehicles provide tax-advantaged savings combined with the power of compounding, so we recommend that people investigate other funding options before taking a withdrawal from a 401(k).”

Reserve Solutions says its customers take out 35 percent less money from their 401(k) accounts than they would via direct loans from the plans.