What's wrong with a Roth IRA? You withdraw the principal penalty-free at any time, and you don't pay taxes on the growth in retirement. You don't even have to invest it in stocks if you're risk-averse.
Yes, but you don't get to put it back in. If you take out, say, 20k, thats 20k of tax advantaged space you never get back. That being said, I max out my Roth IRA every year and consider the ability to withdrawl penalty free a last line emergency source of funds.