Retirement Planning

Anyone saving in a 401(k) or IRA knows that there are consequences if you withdraw the money before age 59 1/2. Not only will you be hit with an income tax bill on your fund distributions, you will also face an additional 10% penalty. This rule is to encourage people to keep their IRAs, 401(k)s and other qualified retirement plans in tact until retirement. But there are some exceptions.

That's right, there are certain times when you can take early distributions from an IRA or 401(k) without penalty. Find out more about these early 401(k) or IRA withdrawal penalty exemptions, how they work and who qualifies.

It's the dreaded choice of new parents everywhere: do I save enough to educate this kid or do I continue feathering my retirement nest? In this case, the selfish option is actually best. So don't sacrifice your own future for the future of your children. Find out why retirement should always be the priority over college savings.

One of the things that can make investing seem complicated is the lingo. You have to learn a whole new language to diversify a 401(k).

But you can break down any mutual fund into a handful of styles. Mutual funds or exchange traded funds invest according to company size, sector, a view on corporate fundamentals, a knack for picking stocks or an exact mirror of the larger market. Lots of funds invest according to combinations of these styles. So how do you make sense of them all? Start here with an investment style overview.

The latest Gallup Economy and Personal Finance survey finds that the average age at which people actually retire is now 61. Twenty years ago, in the early '90s, the age was 57.

The folks at Gallup says the average retirement age will only increase in the coming years. I fully expect to retire around 71, and that's OK with me. I keep thinking of that Prudential "age stickers" commercial where they ask people to give the age of the oldest person they know. The people place stickers on the age, creating a visual map that's very powerful. It shows we are living longer, and should prepare ourselves to work a bit longer, especially if we haven't prepared for retirement in the early years.

Looking for something meaningful to give your wife this Mother's Day? If she is a stay-at-home mom, a spousal individual retirement plan is a great choice. The working spouse can contribute the maximum amount to an IRA for their nonworking spouse each year, and help build a retirement cushion for the partner who does so much work but doesn't get paid for it.

No offense intended. That might read better as: Yo, Mama needs a retirement plan! Because mama does. Mamas do. Need retirement plans, that is. Even those who don't get titles, promotions, bonuses--or even paid--for all of the work you do as household CEOs (that's a pretty cool title, actually).

Every mom should have a retirement plan. Think your kids are going to take care of you after your money has run out? I'd like to believe that will happen with my kids, both under age 8. But then I ask friends with grown kids if they think it will happen, and they almost never do. So I've decided not to make that my primary retirement plan (just a fancy dream). Then I ask myself if I could afford to support my parents for, say, 30 years. The answer is no. Or, maybe. But I hope I don't have to. (I don't have to. My parents come from the age of the pension as well as the age of the 401(k), and can count on Social Security.)

Don't put your own kids in that position. There are ways for all kinds of moms to save for retirement. Besides, you owe it to yourself. Think of it as a practical indulgence. Happy Mother's Day!

Are you loving where the Dow is headed these days? (Hint: Up. It closed over 15,000 this past week for the first time ever.) If not, you probably aren't invested in stocks. But it's not too late. Start today and become a better investor tomorrow.

Investing superstar (and all-around sensible grandpa type) Warren Buffett is now @WarrenBuffett on Twitter. He may be behind the times technically, but he's a leading thinker when it comes to financial markets and stocks in particular.

Stocks are like anything else. To get interested, listen to the personalities talk. Or, in this case, tweet. Buffett is an interesting guy, and definitely worth following if you want to know more about investing. Happy Follow Friday!

Happy Sunday! Here are two new retirement investing terms to ponder this week: risk tolerance and contingent beneficiaries. Check out more in our retirement planning glossary.

Today is Teach Children to Save Day, a national day of financial education developed by the American Bankers Association. It's an important program. Savings skills should be developed and nurtured during kids' early years.

So how do you help your kids understand money? Financial advisor Bruce Helmer outlines a few ideas in his new book, Real Wealth: How to Make Smart Money Choices for What Matters Most to You:

• Teach values first, regardless of income. If you teach self-esteem, commitment to excellence, respect and concern for others and accountability, you can certainly teach them about money and its role in their lives.

• Teach children the joy of work. Lead by example. Your actions speak more loudly than your words.

• Let your children manage money. Kids should have some discretionary money, which means you can't veto how your kids spend it. Let them learn from their wise and impulse purchases. Experience teaches that not all things are as good as they look on television ads.