In an effort to provide for their children's education at all costs, some parents neglect their own retirement savings. If your budget doesn't allow you to save simultaneously for your child's education and your retirement, many professionals recommend that you forego the education savings. Children have various options for paying for their education, including student loans and other assistance programs, and they have a working lifetime to repay those debts and move ahead.

If your retirement planning comes up short, however, you may find yourself financially dependent on your children. Maintaining your own financial strength is key to the success of both your children's future and your own. If you must, you can withdraw your retirement funds to help pay for your child's education. Federal law now allows you to do so without incurring the usual 10% early-withdrawal penalty, but you'll still pay income tax on the portion of the distribution that would otherwise have been subject to income tax. Generally speaking, withdrawing money from your retirement plan should be considered a last resort because it could jeopardize your future financial security.

Whether you're been laid off or you're moving to a better opportunity, or even scaling back on work, career changes are a big event. Before you fully focus on your future, however, don't forget an important financial decision—how to handle the money you've accumulated in your current employer's retirement account. The decisions you make about this retirement money could affect your future financial security.

Ask your employer about your existing retirement plan. Your options will vary depending on the type of plan and your length of employment. Generally, you'll have three basic choices for 401(k) plans or other similar plans - reinvesting, transferring, or cashing out. If you've been laid off, you may have an additional choice - maintaining assets in your employer's plan. You'll probably want to carefully explore your options and consult with a professional before making any decisions. And, you'll want to avoid triggering unnecessary tax liabilities.

If you've been laid off, talk to your employer to determine if you may be able to leave your savings in your existing plan. Your assets remain in a qualified tax-deferred or tax-free account. You won't be able to make subsequent contributions but you'll still have control over how your money is allocated among the plan's investment options.

You can keep your retirement savings on track by reinvesting the money in another tax-deferred retirement savings program such as a rollover IRA. If you roll your money over correctly, you'll avoid taxes and penalties. First, don't procrastinate. You must roll over your money within 60 days of the date your distribution was issued. If you wait, the money will be considered ordinary income, and you'll owe taxes and possibly a penalty. You'll also want the distribution check made out to the new plan administrator or IRA trustee. If the check is made out to you, 20% must be automatically withheld for federal income taxes.

A Roth IRA is another option. Roth IRAs accept only after-tax contributions, so you'll create a taxable transaction if you roll your retirement money into one of these accounts. However, the money will grow tax deferred and, if you've had the account for at least five years, all withdrawals after age 59½ are tax-free.

You'll need to check with your new employer to see if your new plan offers a transfer option. If it does, you can open a conduit IRA, which is a temporary account in which your money can be invested until you can transfer it into your new plan.

Just taking the cash and spending it is a costly choice with a potentially significant long-term impact on your financial future.

If you cash out, you'll owe federal taxes at your ordinary income rate and a 10% penalty if you are under age 59½. Depending on where you live, you may also owe state and local taxes. This means you could lose nearly half of the money in your account to taxes and penalties.

You'll also forfeit the long-term benefits associated with tax-deferred compounding. If left to grow over a long period, even a few thousand dollars can grow to a sizeable amount. A $10,000 investment, for example, could grow to more than $55,000 at a 6% return over a 30-year period.*

Think carefully before you decide to cash out your retirement account. Your future financial security may depend on that money.

If your current employer's plan allowed you to make both pre- and after-tax contributions, you'll need to track these funds separately and check with a professional about the details for rolling over these funds. You won't want to pay taxes twice on the same money.

*This hypothetical example is for illustration only and is not intended to reflect the return of any actual investment. Investments do not typically grow at an even rate of return and may experience negative growth.

If you're about five years away from retirement, it may be time to do some specific thinking about what your life in retirement will look like and how you will use your personal savings and other potential income sources to fund it. After years of working, you'll have more free time, but you may also be at a very different financial place. Instead of focusing on accumulating assets, you'll be focused on using those assets wisely, with the goal that they will last throughout your retirement. Every decision you make about your retirement lifestyle will affect your retirement assets, so each must be weighed against the other.

Your retirement goal may include leaving the workforce before age 66. If so, you may need an investment portfolio or other assets that can finance your monthly expenses. Your eligibility for Social Security benefits may also play a role. If you were born in 1960 or later, your full Social Security benefits are not available to you until age 67. You can claim benefits earlier but only at a permanently reduced level. If you leave the workforce at 55, you'll be retired for 12 years before you can collect full Social Security benefits.

Likewise, you won't be eligible for Medicare for several years, so you may need to plan to pay full medical insurance premiums, as well.

Then there are lifestyle choices. How will you use your time? If you plan to work part-time or start a small business, you may need to rely less on your accumulated investment portfolio. If you plan to travel or indulge in an expensive hobby, you may need to rely heavily on your nest egg.

Even where you live must be part of your decision process. A Manhattan high rise, Broadway shows and five-star dining will likely require heavy monthly withdrawals. On the other hand, a modest home in a small town, gardening every afternoon and barbecuing on the deck will cost much less. Which fits your style?

You must also consider factors over which you have no particular control. How long will you live? No, it won't be forever, but it could be 30 or 40 years after you retire. Do you have favorable genetics? Do you exercise and eat right? If you are married, you'll need to plan together and anticipate life expectancy for both partners. Statistical analysis can provide ballpark numbers, but even these statistics are averages and don't apply to everyone.

Beyond lifestyle factors, there are day-to-day investment considerations. If you have a pension plan, you'll need to calculate the monthly benefits it will provide. If you have a 401(k), you'll probably base many decisions on how much cash flow you can generate from those investments without running out of money. Do you know what rate of return you should use to estimate the annual income your portfolio might generate?

If your anticipated budget and your anticipated annual income are mismatched, you need to know that before you leave your job. Armed with this knowledge, you'll be able to make a more informed decision about the timing of your retirement. You may decide to delay retirement a few years to provide more time to put money away and let the assets you do have continue to grow. You could also decide to go ahead and retire, but work part time.

After accumulating assets over a lifetime of hard work, you will spend those assets during your retirement in a uniquely personal way. Designing your retirement in advance can help you feel more in control of your future.

This is a good question to start with. But a better question might be: how much income will you need each year to meet your obligations and still maintain the standard of living you desire during your retirement. Like most people, you probably want to be reasonably free to spend with confidence in retirement without the risk of running out of money. So, how do you begin to figure out what kind of income you'll need to live comfortably in retirement?

Take a look at what you spend today in various categories and estimate how these amounts will change when you're in retirement. Which expenses will remain fixed? Which expenses will change? Your housing costs, in particular, may change — whether you've paid off the mortgage, relocated to a less expensive locale or otherwise downsized your living arrangements, what you're paying now may not be the same as what you pay in retirement. You'll also no longer see the tax benefits of saving for retirement, and other costs, like healthcare, may rise.

It's also important to think about your desired spending goals, either ongoing annual amounts for essential expenses or one–time events. Take into account travel, hobbies, charitable giving and other expenses related to the specific desires you have for the lifestyle you want to live in retirement. Be sure to think about the impact of taxes and inflation as well. Establishing a comprehensive spending budget is central to creating a good retirement lifestyle plan.

Start adding up income distributions you expect from sources such as Social Security, your 401(k), personal IRAs, pension plans (if any) and the like. Social Security plays a key role in the retirement plans of many. To get an idea of your potential Social Security benefit, visit the Administration's estimator tool. You may also have savings or other sources of potential income you've built up throughout the years, and it's important to review everything to get a clear picture of your financial situation.

Once you know how much you need and how much you're expecting from your existing retirement income sources, you can generally estimate the balance you need from your investments. This comparison between your expenses and income should reveal whether your spending budget is on track and what your "funded status" is. Your advisor will factor in your "funded status" when making recommendations and creating an investment portfolio designed to give you the cash flow you need in retirement.

If your goal is to purposefully draw-down your assets and leave little monetary legacy, conventional wisdom generally starts with a 4% draw-down rule, but individual circumstances will vary. That is why it's important to work with a financial professional to tailor a plan to your specific withdrawal and legacy needs.

Since your retirement income needs are different than your neighbor's, be sure to give your financial professional a complete picture of your goals, your assets, and your expected spending needs. And review your situation at least annually or whenever something unexpected occurs.