It's a move of desperation: Raiding your retirement plan to get at the cash because life has thrown you a curve ball.

But desperate economic times may call for desperate measures; sometimes you just have to get cash from somewhere. And if that's the case, there are some ways to get at that retirement money before age 59, without paying the hefty 10% penalty which generally applies for touching those funds early.

Of course, it's better not to withdraw money from your 401(k)s or individual retirement accounts before you've retired -- since it is an uphill battle to rebuild savings and few are able to do it.

If you've got emergency savings or taxable accounts, use those funds first. And if you have the ability to take a loan from your 401(k) -- which is generally limited to the one at the company where you now work -- that's a smarter move than an outright withdrawal. However, if you had other options, perhaps you wouldn't be reading this far.

Generally, if you need to take cash out of your retirement plan, whether 401(k) or IRA, before the age of 59, you'll owe income taxes and a 10% penalty for early withdrawal. No matter what, you'll still owe the taxes, but there are situations where you can avoid paying the penalty.

You can generally withdraw penalty-free from a 401(k) or IRA if you become permanently disabled, if you need to pay for medical expenses (if they're above 7.5% of your adjusted gross income), or if you're facing an Internal Revenue Service levy (that's a tough enough one without the extra penalty).

You can also start a regular retirement stream early, or access income from your retirement funds in regular payments for at least five years till you turn 59��.

The rules on IRAs also allow you to take some cash out penalty-free to pay health insurance premiums if you're unemployed, to help you make a first home purchase, or to cover the costs of college tuition and expenses.

The exception that flies under the radar -- and that may be most useful, especially for those in their 50s who are now struggling (or are hoping to retire early) -- is the one where you start an income stream early.

In Internal Revenue Service parlance, you won't face a penalty for withdrawals if you set up "substantially equal periodic payments" or what's sometimes called 72(t) after the section of the tax code.

"There are certain exceptions to the penalty for people who have logical, normal commitments," explains Allison Shipley, a partner in the personal financial services practice of PricewaterhouseCoopers in Miami. "The one I used to focus on with people is making substantially equal periodic payments. If you need to dip into your savings, but you're still trying to manage it for retirement, you could start a distribution program and save on the penalty."

Taking advantage of this "substantially equal periodic payments" strategy involves a little bit of complicated math, as these annuitized payments have to be calculated based on your life expectancy (or one of two alternate, more complex, methods), and you have follow the IRS's rules closely. But your 401(k) administrator or IRA administrator should be able to walk you through it. There also are online calculators, such as one from Bankrate.com, which can help.

Here's how it works: Say you're 50 years old and have $400,000 in an IRA, and you need some cash but hope to avoid the penalty. You'd look up your life expectancy, then divide your account balance by it, repeating this calculation each year with new figures for both your account balance and life expectancy. In this example, cribbed from the IRS's explainer on the topic, that would be $11,696 in the first year. Once you start taking these payments, you have to continue doing so for at least five years or until you turn 59 ��, whichever is longer.

It doesn't give you a huge amount of cash without penalty, but it might just give you enough. After all, the average amount of a hardship withdrawal from a 401(k) was just $5,510, according to a 2011 study by consultants Aon Hewitt.

"I wish I had known about that," says Vicki Contavespi, a public relations executive, who is still rebuilding her retirement savings with new contributions, after raiding it, in dribs and drabs, during a 13-month period of unemployment a decade ago. "I was only taking money out when I desperately needed to take it."

Since the financial crisis began in 2008, not surprisingly, the number of people raiding their retirement funds has increased: At the end of 2010, 28% of active 401(k) participants had loans outstanding, up from 22% five years earlier, and another 7% took withdrawals, up from 5%, according to the Aon Hewitt study.

If you have multiple retirement plans from multiple jobs over the course of your career, you'll need to read the fine print carefully in order to choose which one to tap first.

Not only are the rules for IRAs different from those for 401(k)s, but corporations also may add additional rules on distributions from their own 401(k)s.

"It can be very confusing, and in some cases we're talking about pretty big dollars," says Gil Charney, principal tax research analyst at H&R Block's Tax Institute. "Sometimes it's better to take a distribution from an IRA where a penalty exemption exists than thinking broadly that the penalty exception will exist for the 401(k) when it doesn't."

A final note: If you have a Roth IRA as well as a traditional one, it may make sense to tap the Roth first. That's because you already paid income tax on the money you put in, so if you've held it for five years, and meet the rules for avoiding the penalty, you likely won't have to pay any more tax now.

Hopefully, you'll never have to tap your retirement savings early. But if you do, better to do it wisely. (Editing by Linda Stern and Andrea Evans)

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How to Raid Your Retirement Plan

With the different features and benefits that apply to the various types of individual retirement accounts (IRAs) and plans, choosing the one that is most suitable can give you gray hairs before they are due. In some cases, the process is easier because choices can be narrowed down by eliminating the plans for which an individual is ineligible. In this article, we'll look at some scenarios and the factors that should be considered when you are faced with choosing which IRA is best for your golden years.

See: Introduction To Retirement Plans

Eligible for a Roth IRA and a Traditional IRA
For an individual who is eligible for both a Traditional IRA and a Roth IRA, making the choice usually depends on whether the individual is eligible (or wants) to claim the deduction for the Traditional IRA contribution, and the individual's current tax bracket compared to the projected tax bracket during retirement. This choice is determined by which plan results in lower taxes and more income. For more on this see, Roth Or Traditional IRA ... Which Is The Better Choice?

Eligible for a Roth IRA, a Traditional IRA and a Salary Deferral Contribution
For an individual who is eligible for a Traditional IRA contribution, a Roth IRA contribution and a salary deferral contribution to a 401(k) plan, but cannot afford to contribute the maximum amount to the 401(k) plan and the IRA at the same time, a decision must be made as to whether it is more beneficial to choose to make one, two, or all three work. Some of these concepts can also apply if the individual has the option of contributing to both a traditional 401(k) and a Roth 401(k).

Choosing One
Let's take a look at Casey, who works for Company A and is eligible to make a salary deferral to Company A's 401(k) plan.

Casey's annual compensation is $50,000. Casey can afford to contribute only $2,000 each year. Casey feels that the fees that will be charged to each accounts makes it cost prohibitive to split the contribution into more than one account. Therefore, Casey must decide whether it makes better financial sense to contribute to the 401(k) or an IRA. The 401(k) will likely be the better choice if Casey will receive a matching contribution on his salary deferral contribution. Let's look at the growth of his accounts over a 10-year period, assuming a matching contribution of $1 for each $1 Casey contributes, up to 3% of his salary. This means that Casey will receive a matching contribution of $1,500 ($50,000 x 3%).

No Matching Contributions Made
If no matching contribution is being made to the 401(k) account, Casey will need to consider the following:
The investment choices available: Large corporations typically limit investment choices to mutual funds, bonds and money-market instruments. Smaller companies may do the same, but are more likely to allow self-direction of investments, allowing the participant to choose among stocks, bonds, mutual funds and other available investments, similar to the investment options available in a self-directed IRA. If investments in the 401(k) are limited, Casey will need to decide whether he prefers to contribute to an IRA, which would provide a broader range of investments from which to choose. The fees that apply: A hot-button issue will probably always be the fees that are charged to 401(k) accounts. These are not as visible as the fees that are charged to an IRA, leading many participants to believe that 401(k) fees are minimal to non-existent. (To learn more, check out the Department of Labor's report "A Look At 401(k) Plan Fees".) Casey would need to research the fees that apply to the 401(k) plan and compare them with the operational and trade-related fees that apply to the IRA. Accessibility: While retirement savings are intended to accumulate until retirement, situations sometime arise that leave the participant no choice but to make withdrawals or loans from their retirement accounts. Generally, assets in a 401(k) plan cannot be withdrawn unless the participant experiences a triggering event. However, if the plan has a loan feature, Casey could take a loan from his account and repay it within five years (or longer if the loan is to be used for the purchase of a principal residence). IRA assets can be withdrawn at any time. However, except for a rollover contribution, the amount cannot be repaid to the IRA. For information about taking loans from a qualified plan account, see Should You Take A Loan From Your Plan?, Borrowing From Your Plan and Eight Reasons To Never Borrow From Your 401(k).
Professional Investment Management Cost and Availability: If Casey is not proficient in investment management or he does not have the time properly manage his plan investments, he may need to engage the services of a professional investment advisor to make sure his asset allocation model is consistent with his retirement goals and objectives. If Casey's employer provides such services as part of its benefits package to employees, Casey will not incur an additional cost to have a professional manage his investments. This perk may not be available for an IRA unless the employer extends such services to assets outside of its employer-sponsored plan. These points may be well worth considering, even if matching contributions are being made to the 401(k) account. If the matching contributions are significant, they may outweigh the benefits of saving in an IRA instead of a 401(k).

Choosing All Three
Now, let's take a look at TJ, who can afford to fund his 401(k), his Traditional and his Roth IRA. If he can afford to contribute the maximum permissible amounts to all his accounts, then he may have no need to be concerned with how to allocate his savings. On the other hand, let's assume Casey can afford to save only $7,000 for the year. The points of consideration for Casey (above) may also apply to TJ. In addition, TJ may want to consider the following:

Getting the maximum match: If a matching contribution is being made to the 401(k) plan, consider the maximum amount that needs to be contributed to the plan in order to receive the maximum available matching contribution. For instance, if TJ's compensation is $80,000 per year and the matching contribution formula is $1 for $1 up to 3% of compensation, he will need to contribute at least $2,400 to his 401(k) plan in order to receive the maximum available matching contribution of $2,400. Choosing the IRA: Because TJ's IRA contribution will be limited to the dollar amount in effect for the year, he will need to decide whether to choose the Roth IRA, the Traditional IRA or to split the contribution between both.
Which to fund first: It is usually best to make contributions to the retirement accounts early in the year, or a little each month - beginning early in the year so that the assets can start accumulating earnings as soon as possible. Consideration must be given to how matching contributions are made. Some companies contribute the amount in one lump sum at the end of their tax-filing deadline, while others contribute the amounts throughout the year. If the latter applies, making salary deferral contributions to the 401(k) early in the year is recommended. Other Points of Consideration
In addition to the points listed above, individuals should consider other factors such as:
Age and retirement horizon: An individual's retirement horizon and age are always important points of consideration when determining proper asset allocation. However, for individuals who are at least age 50, participating in a plan that includes a catch-up contribution feature can be an attractive choice, especially if the individual is behind in accumulating a retirement nest egg. If this is the case, choosing to participate in a 401(k) plan with a catch-up feature can help to add larger amounts to the nest egg each year.
Purpose of funding a retirement account: While retirement accounts are usually intended to finance one's retirement years, some individuals prefer to leave these accounts to their beneficiaries. If this is the case, consideration must be given as to whether the individual wants to leave tax-free assets to beneficiaries, and whether he or she wants to avoid taking required minimum distribution (RMD) amounts. Roth IRAs and Roth 401(k)s would allow the individual to pay the taxes owed on the retirement balances during his or her lifetime. For Roth IRAs, the RMD rules do not apply to the IRA owner, allowing a larger balance to be left to beneficiaries.

See: Update Your Beneficiaries.

Conclusion
For those who are eligible to fund multiple types of retirement accounts, choice is not an issue for those who have the money to fund them all. For those who can't, choosing which to fund can be challenging. In many instances, it boils down to whether the individual prefers to take the tax breaks on the back end with Roth accounts, or on the front end with Traditional accounts. The purpose of funding the account, such as retirement versus estate planning, is also an important factor. A competent retirement planning advisor can help those facing these issues to make practical choices.

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Which Retirement Plan Is Best?

As the baby boomers begin to enter the retirement years, the concept of retirement is being explored in a variety of films. Many movies have featured retirees going on new adventures and forming new relationships at a time we traditionally associate with slowing down. Check out Hollywood's take on retirement in these seven films.

[See The 10 Best Places to Retire in 2012.]

About Schmidt (2002). This movie begins just as Warren Schmidt (Jack Nicholson), an insurance company actuary, ticks off the final minutes of his career. Soon afterward his wife, who Schmidt was planning to travel with in retirement, dies. Schmidt then takes a trip to his daughter's wedding in a Winnebago and reflects on his life and future plans.

The Artist (2011). An older silent film star, George Valentin (Jean Dujardin), finds himself pushed out of the workforce earlier than planned as silent cinema is replaced by the talkies in this silent film. Meanwhile, a much younger women, Peppy Miller (Bérénice Bejo), who Valentin happens to be in love with, rises to success in the new medium.

The Bucket List (2007). Morgan Freeman and Jack Nicholson play two men who meet by sharing a hospital room while undergoing treatments for terminal cancer. They decide to go on an around-the-world vacation, during which they fulfill a wish list of things to do before they kick the bucket.

[See 7 Misconceptions About Retired Life.]

Gran Torino (2008). Retired auto worker and Korean War veteran Walt Kowalski (Clint Eastwood) finds himself growing increasingly alienated from and angry with his family and neighbors. Kowalski strikes up an unusual friendship with the Hmong immigrant family next door when their son, Thao, attempts to steal his 1972 Ford Gran Torino as initiation into a gang. And this retiree refuses to quietly fade away.

The Notebook (2004). Can true love last throughout retirement? This movie makes the case that it can as two retirees (James Garner and Gena Rowlands) in a nursing home relive the summer they met and their dramatic courtship.

Something's Gotta Give (2003). Jack Nicholson and Diane Keaton find love after age 50, but not before each has a fling with a younger partner, in this romantic comedy directed by Nancy Meyers.

[See 10 Important Ages for Retirement Planning.]

Up (2009). Retirement is the adventure of a lifetime in this animated Disney-Pixar film. Retired balloon salesman and widower Carl Fredicksen journeys to South America in a floating house with an 8-year-old wildnerness explorer and meets his childhood hero.

Twitter: @aiming2retire

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7 Movies About Retirement Worth Watching

TORONTO, ONTARIO--(Marketwire -02/24/12)- As the February 29th deadline approaches to make a contribution to a Registered Retirement Savings Plan (RRSP) and as part of its ongoing commitment to improving financial literacy, BMO Financial Group will be providing daily retirement tips during the month of February from BMO Retirement Institute Head Tina Di Vito's new book 52 Ways To Wreck Your Retirement...And How To Rescue It.

Tip Number 47:

Dedicate time to understand and plan how your estate will be distributed after death

Planning your estate determines who will inherit your wealth, what will be inherited and in what form (property, cash, stock certificates or other investments), when it will be inherited, and what taxes will be paid on it.

It is important to understand the three basic options available to you to distribute your assets:

1. Beneficiaries named in a will - Different assets can form part of your
estate and will be distributed in accordance with the instructions in
your will.
2. Direct beneficiary for certain accounts - You can name a direct
beneficiary for your Registered Retirement Savings Plans (RRSPs),
Registered Retirement Income Funds (RRIFs) and Tax Free Savings Account
(TFSA). This allows these assets to transfer to a beneficiary without
going through probate which, depending on the province you live in, can
save your estate thousands of dollars.
3. Joint rights of survivorship - You can hold certain assets, such as a
joint savings account or a home, with joint rights of survivorship. Upon
death, the assets become the property of the surviving owner, and again
no probate is required.

All three methods of distribution should work in harmony to achieve your desired wealth distribution.

For more information on retirement: http://www.bmo.com/retirement.

Get the latest BMO press releases via Twitter by following @BMOmedia.

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BMO Retirement Tip of the Day: Understand Your Estate Planning Options

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21-02-2012 19:58 http://www.esnewsreporting.com

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Pacquiao Before Retirement - Mayweather Fight - Video

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22-02-2012 02:15 Glen Campbell who had a monster hit with "Rhinestone Cowboy" in the '70s among other hits was given a Merit Award as he's on his last tour due to Alzheimers.

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GLEN CAMPBELL GETS MERIT AS ALZHEIMERS FORCES RETIREMENT - Video

The idea of retiring at 65 seems almost quaint these days. Even before the recession, rising numbers of people were working past their 65th birthdays, and this trend has accelerated during these past few years. For many, retirement is a forever-retreating goal. For others, moving to part-time work as part of an incremental retirement strategy makes sense.

[See 10 Steps to Fine-Tune Your Retirement Plan.]

Whatever your retirement prospects look like, there are many dates besides the day you stop working that can influence your decision. Here are different age milestones that might affect your retirement decisions.

59½. This is the earliest age at which withdrawals from tax-deferred retirement accounts--401(k)s, 403(b)s, IRAs, and the like--may begin without incurring an early withdrawal penalty.

62. This is the earliest age at which you may begin collecting Social Security benefits. However, the amount of benefits you get will be only 75 percent of what they would be if you waited until you reached your full retirement age (66 or 67 for people born after 1943).

65. You are eligible for Medicare benefits when you turn 65. If you are still covered by employer health insurance (either directly or through your spouse's health plan), you do not need to sign up for Medicare right away. Otherwise, you have a seven-month window (three months before your 65th birthday up until four months after your birthday) to sign up. This is an important deadline: If you miss it, you may wind up paying higher Medicare premiums for the rest of your life.

[See How to Size Up Your Retirement Nest Egg.]

66. If you were born between 1943 and 1954, your full retirement age (FRA) for Social Security benefits begins with your 66th birthday. The FRA is an important date. It is the date at which you are entitled to 100 percent of your Social Security retirement benefit. Because you can begin benefits as early as age 62 or defer them as late as age 70, your FRA controls the percentage of your full benefits that you would receive at these other ages. It also affects the tax treatment of any outside income you earn. And it is used to determine when your spouse can collect benefits based on your covered Social Security earnings.

67. If you were born in 1960 or later, this is your FRA.

70. This is the latest age through which your Social Security benefits will increase for each year you defer beginning to collect benefits. If your full retirement age is 66, for example, your benefits will rise by about 8 percent a year each year until you turn 70. They will not increase after that date, so there is no benefit to deferring benefits past your 70th birthday. In addition to collecting 132 percent of your FRA benefit if you wait until age 70, you would also collect any annual cost-of-living adjustments. So your "profit" for waiting each year is a return of 8 percent plus the rate of inflation.

[See Retirement Plans That Weather Economic Storms.]

70½. If you are retired, you must begin taking money from your tax-deferred retirement accounts when you reach this age. The smallest amount of money you can withdraw without incurring a tax penalty is called your RMD, or required minimum distribution.

The size of your RMD is calculated by the government based on life-expectancy tables. Legislation is regularly introduced, including in the Obama Administration's proposed 2013 budget, to relax RMD rules. The goal of the proposals is to give retirees more control over the timing of their account withdrawals.

85. This is a standard date at which payments begin for what are called longevity annuities. These are deferred annuities purchased 20 or even 30 years earlier. They are designed primarily for people who are worried about running out of money before they die. Because many people will have died before turning 85, insurance companies are able to provide attractive rates for these products. And because retirees know how much money they would begin receiving should they survive to age 85, they can spend down their other assets by that date, should they choose, without fear of later running out of money.

Your Age at Retirement. This is, of course, the most important of all the ages listed here. Good luck!

Twitter: @PhilMoeller

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9 Key Ages for Retirement Money Decisions

Given the recent economic crisis in places like Greece and Italy, it's difficult to believe that the retirement age of workers in these countries is low. Turkey, for example, used to have a retirement age of 60 until the government abolished it and changed it to 25 years of contributions, meaning that depending on the age they entered the workforce, men and women would be eligible to retire based on the years they contributed to their retirement plan. The Organization for Economic Co-operation and Development (OECD) calculated that workers who made contributions for 25 years and started working at age 20 would be able to retire at 45. Greece closely follows Turkey in retirement age. In Greece the retirement age is 57 up from 55 in 1959. In Italy the age is 59, but will increase to 65 by 2030.

Turkey
Despite having low retirement ages, these countries have not been able to handle the economic strain the increasingly older population is placing on their government pension plans. This is demonstrated by their increasing retirement ages. Turkey has been struggling for years to keep up with its pension plan payouts. In 2008, the government was confronting a system that ate up 17% of its budget. Payments for the 12 years leading up to 2006 totaled 119% of that year's gross domestic product. Its early retirement age was threatening to bankrupt the country unless lawmakers decided to make a change. Social security was consuming almost 4% of gross national product. According to the OECD, this figure is forecasts to increase to 6% by 2045 if there are no changes.

In 2010, The United States Social Security Administration stated in their "Social Security Programs Throughout The World" report that as of 2036, Turkey's retirement age will rise gradually to age 65 by 2046 (men) and 2048 (women). This would allow pensions to accumulate more slowly.

National Retirement Age
Few countries now have a national retirement age of 60, including Belgium, Hungary, Korea and Luxembourg. France's current retirement age is 60.5. Given the increased life expectancy rates, many workers will have to wait longer to reach retirement. According to the OECD, to accommodate the growing old population, many countries are increasing their pensionable age.

The U.S. currently has the third highest retirement age: 66 and will increase to 67 by 2022. Iceland and Norway have the oldest 2010 retirement age of 67. Denmark will be gradually rising its retirement age to 67 by 2028. In the U.S., workers can start receiving social security retirement benefits at the age of 62 but at a lesser amount. However, the United Kingdom is currently projected to overtake all other countries by 2047 with a retirement age of 68. According to the OECD, the pensionable age will reach 65 for both sexes by 2020.

The Bottom Line
Due to the economic strain life expectancy rates are placing on countries, governments around the world are encouraging people to work longer. Some countries are even placing strict qualifying conditions on workers who want early retirement. Early retirement seekers get fewer pensions while a larger payout is given to workers who stay in the workforce longer. Some countries are even taking the retirement age limit further.

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Will Low Retirement Ages Last Forever?

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05-12-2011 13:14 Planning and education are crucial components to making sound decisions when considering retirement. This two-hour webinar will provide information about your CalPERS benefits and the retirement process. Transcript: http://www.calpers.ca.gov

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CalPERS Planning Your Retirement Webinar - Video

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10-02-2012 11:00 EJ, Kenny and Charles tell Shaq that the Lakers are going to retire his jersey next season! I do not claim ownership or makin' money from this video. All rights reserved by copyright owners. ---- DISCLAIMER! ---- Copyright Disclaimer Under Section 107 of the Copyright Act 1976, allowance is made for "fair use" for purposes such as criticism, comment, news reporting, teaching, scholarship, and research. Fair use is a use permitted by copyright statute that might otherwise be infringing. Non-profit, educational or personal use tips the balance in favor of fair use.

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Inside The Nba - Shaq's Lakers Retirement Jersey - (10-2-2012) - Video