It depends who you think your adversary is and what they will have access to. You should never "store" a key, rather let the user enter it - that is the only secure way. So when I'm encrypting a file, I never store the key (well, you could argue it is "stored" in memory, but that is transient and a whole subject in and of itself).
Many apps will store something in a file so that users don't have to keep entering the info. This should never be plain text, rather a hash of the password or the password with other stuff combined (SHA256 or SHA512 are quite common-don't use MD5), but this assumes the adversary will either not have access to that hash or will not be able to hook into the software where the key is used if they do get their hands on it. It's more of a case of "security through obscurity" than "secure".since whilst they may not be able to recover the original plain text directly, they may be able to inject the key, look it up on a public database or use it at some point in the applications process space. When used in this way, the key will usually be the result of not only the password, but the password combined with a salt. This, in essence is just another obscurity layer but means that two pieces of information are now required to reconstitute the original. It will, however, be for naught if they are both stored in the same place (a website, for example will store the hash in the DB, but the salt in a file).
Software is a tricky beast since if a competent adversary has access to the machine, then all bets are off!.It's just a matter of time, persistence and budget.