Should I borrow against my retirement fund in order to level my finances?

NEVER. You should adjust your SPENDING to fit your income. That MAY mean selling the house and/or one or more cars and moving to something less expensive.

Note: You are NOT approaching a dangerous level. You PAST that level the FIRST time you borrowed to make a payment on ANYTHING.

If you borrow against your retirement - will this get you back to 100% square and you are good to go forward? If this is only a stop gap measure to get you through the next 2 or 3 months and then you are back to the same problem, then this isn't the answer.

Also keep in mind you may be trading one loan for another. You are going to have to pay back the retirement money. Where is the money coming from to pay that backt?

You left out many details. This is one of the few times you can borrow from your retirement and get away with it, because the markets will crash!

Make the 401 withdrawal

Cut future contributions to matching or zero (401)

Cut home phone, internet and cable tv

Drive cheap car.

Buy some gold and silver

P.S. There is no future in 401K's, switch at once to money market fund or be wiped out!