Some south Louisiana flood victims and family members will be allowed to obtain loans and hardship distributions from their 401(k)s and similar employer-sponsored retirement plans, the IRS said Tuesday, but doing so will still carry hefty penalties and tax consequences.

U.S. Sen. Bill Cassidy's office said Tuesday he will be pushing for a waiver of the penalties.

Without a waiver, tapping retirement plans shouldn't be the first place to look for cash, according to some experts, who warn that doing so could hamper long-term financial security. Plus, they point to other potential sources of funds and loans.

Although not required, 401(k)s and similar retirement plans can allow participants to withdraw or borrow money in some cases of "immediate and heavy financial need." Typically, there are only a few exemptions for avoiding the 10 percent penalty when withdrawing early from a retirement plan, such as after the death of the plan's participant or after a staggering disability or medical expense. The maximum amount available for a hardship distribution is limited to the employee's total elective contributions.

Generally, a hurricane or major natural disaster isn't something that's considered to be a qualifying hardship. But Tuesday's guidance from the Internal Revenue Service makes an exception for residents in flood-impacted areas, and also lets people residing outside the disaster area take out a retirement plan loan or hardship distribution to help out a family member who lived or worked in the designated disaster area.

But retrieving the money early from an Individual Retirement Account or a 401(k) plan has consequences. Those taking money out of their retirement plan will be subject to a 10 percent penalty if it's done before age 59½, as well as face income taxes.

Typically, 401(k) loans are tax-free if they're repaid over a period of five years or less. But they're also repaid with after-tax dollars, which cuts into savings.

Participants with IRAs are barred from taking out loans.

Participants in 401(k) plans as well as employees of public schools and tax-exempt organizations with 403(b) tax-sheltered annuities and state and local government employees with 457(b) deferred-compensation plans may be eligible to take advantage of loan procedures, the IRS said.

Hardship withdrawals must be made by Jan. 17, 2017, in order to qualify.

The IRS on Tuesday also lifted restrictions prohibiting 401(k) and 403(b) contributions for a six-month period after a hardship distribution.

"As a result, eligible retirement plan participants will be able to access their money more quickly with a minimum of red tape," the IRS announcement said about the broader changes.

Cassidy had urged the heads of the Labor and Treasury departments, as well as IRS Commissioner John Koskinen, to consider allowing hardship waivers so that residents could "attain access to their retirement funds quickly without bureaucratic red-tape hurdles."

“This is a basic relief tool that is immediately needed during the recovery from the recent flooding in Louisiana,” Cassidy wrote.

State Rep. Kenny Havard, R-Jackson, recently proposed allowing storm victims in federally designated disaster parishes the ability to access retirement accounts without penalty, a move Cassidy said he will push in Congress.

That idea is similar to what was implemented after Hurricane Katrina. As part of the Katrina Emergency Tax Relief Act of 2005, people living in disaster areas were allowed to withdraw money early from an eligible retirement plan — up to $100,000 — without paying a penalty. In that case, the money didn't need to be repaid but was taxable. However, if an account-holder re-contributed the money into an eligible retirement plan within three years, the distribution was treated as a rollover.

Still, some financial experts say that people hard up for cash should use caution before turning to their retirement accounts.

Gerard Schreiber, a Metairie accountant who played a prominent role in resolving post-Katrina tax issues, said displaced residents need to ensure that they have "immediate living expenses" but should otherwise hold off drawing money from retirement plans for now.

"It's a last resort," Schreiber said. "We are at the beginning stages of the recovery, and so we don't know where we are with insurance, we don't know where we are with federal recovery funds, we don't know whether there'll be a grant program. Nothing is certain right now. We're proceeding in the dark, so to speak."

"Certainly, that should be a last chance, just because most people are clearly under-saved for their retirement," said Walter Lane, an associate professor of economics at the University of New Orleans. "Just because it's there, it's what people look for."

Instead, Lane and other experts recommend pursuing options like bank loans and low-interest loans from the U.S. Small Business Administration. The federal agency is allowing homeowners in declared disaster areas to apply for up to $200,000 to replace or repair their primary residence.

In addition, renters and homeowners can borrow up to $40,000 from the SBA to replace or repair personal property, such as clothing, furniture, cars and appliances, that are damaged or destroyed in a disaster.

"Getting that back in is something that's usually low on people's priorities," Lane said of returning money from a retirement account. "If they're a person that has enough to spare, maybe, but that's certainly not the case for most Americans."

Dorothy Kendrick is giving it a good, hard look.

It didn't take Kendrick long to burn through nearly $5,000 in savings to get the muck cleared from her flooded home in the Sherwood Forest neighborhood of Baton Rouge, which received a foot of water.

When a contractor last week offered to get work started if she'd put down a few thousand more, it left her scrambling for quick cash. That left her retirement account as an obvious possibility, where she'd stashed money for more than two decades.

"This is not about insurance. This is about me trying to pull the money that I put in," Kendrick, 57, said.

But she was shocked to learn that withdrawing the money would still be subject to penalties.

"That's where my money is," she said. "That's the only money I have."

Follow Richard Thompson on Twitter, @rthompsonMSY.