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NEW YORK (MainStreet) -- Over 30 million Americans use their retirement funds to pay for a short-term "emergency" issue, like the temporary loss of a job, or to cover a big home maintenance issue, like a blown-out heating unit or big repairs on the family vehicle.

According to, at least that number of "retirement fund dippers" is going down, but there are still way too many Americans treating their long-term savings as a piggy bank.

"That's still a huge number," says chief financial analyst Greg McBride. "Using retirement savings to cover an emergency is a permanent setback to retirement planning." 

There's a larger problem beyond raking funds out of your retirement account, which leaves you with less cash for your post-careers and leads to stiff tax bills when taking funds out of an IRA or 401(k) before retirement age. Most Americans just don't have a good plan for financial emergencies, and that's why they raid their retirement funds for short-term financial needs.

"People are under-saved for an emergency," McBride adds. "One in four Americans don't have an emergency fund."

Fortunately, there are better ways to pay for short-term emergencies, while leaving your retirement portfolio intact.

Pamela Yellen, a best-selling book author and consumer financial advocate, advises people have at least "two years' worth of household expenses in safe and liquid savings vehicles, to enable you to cover whatever emergencies life throws at you." While there are "minuscule returns available today in savings accounts, money market accounts, and certificates of deposits," at least they provide both the guaranteed growth and 'quick access' liquidity you need to get cash fast when disaster strikes, she adds.

Finance professionals also strongly advise taking a proactive approach to dealing with financial emergencies and creating a cash fund to deal with trouble well before it lands on your front doorstep. "I help clients avoid dipping into retirement accounts by explaining that, with proper planning, one should plan for the worst and hope for the best," says Adam Vega, a wealth manager at United Capital Financial Advisers, in Boca Raton, Fla. "Short-term emergencies will always happen, so the best way to avoid pulling money from a retirement account would be to create an emergency fund of three to six months of living expenses. This should be priority in any savings plan as eventually an air conditioner will break, a car will break down and the roof on your home will leak."

Vega adds a key caveat on the emergency account front, too. "Just as your retirement accounts shouldn't be tapped for short term expenses, your emergency fund should be a dedicated account and used only for emergencies," he says.

Another option is home equity conversion mortgages, more informally known as reverse mortgages. "They're really an interesting financial planning tool," notes Charles C. Scott, a financial advisor with Pelleton Capital Management, in Scottsdale, Ariz. "If the person qualifies based on age and equity, there are three choices of how they receive funds. As advisors, the more we learn about them, the more we like it."

Experts also remind retirement plan borrowers of the damage they do, under the surface, every time they grab some cash from their retirement accounts. "Understand that your retirement savings have been accumulating compound interest and by borrowing from it, you will be unable to replenish that amount - if you count the interest you would have continued to accumulate while borrowing the money," says Leslie Tayne, founder of the New York-based law firm Tayne Law Group, P.C. "Depending on your age, this can be detrimental to your retirement plans. You do not want to end up having to play catch up with your retirement, especially if that may mean you having to work longer."

Tayne says she's seen this issue with clients before, and the best path out is to get creative with other financial resources, and steer clear of any long-term investment portfolios. "Before taking out money from retirement to pay for an emergency, it is always best to first weigh your options," she adds. "If it really is a household emergency, see what your homeowners insurance will cover -- if any -- and consider if it's worth it to put the emergency expense on a credit card or personal loan until you have the insurance funds to pay it off."

Make no mistake, your best decisions on financial emergencies almost always involve shying away from raiding your retirement funds for any reason, unless life or death are on the line. As financial experts attest, you'll thank yourself later in life that you left your retirement account alone during trying financial times and figured out another way to solve the problem.