Sound Financial Advice by David McPherson, founder of Four Ponds Financial Planning LLC, Falmouth and Mansfield, Mass.

A savings balancing act: Retirement and college

Today on ABCNews.com, I advise readers it's best to focus on saving for retirement first and college second. This principle is widely accepted within the financial-planning world, yet many parents find it hard to accept.

The bottom line is you can't afford to wait on saving for retirement.

Obama launches retirement savings effort

President Obama over the Labor Day weekend announced a series of initiatives aimed at boosting retirement savings. The effort amounts to a series of rule changes adopted by the IRS such as allowing automatic enrollment in SIMPLE IRA plans offered by small businesses.

I applaud the president's focus on the retirement issue, but in my column for ABCNews.com this week I explain why the announcement left me underwhelmed.

Let's hope there's more to come on this issue.

Student Loans vs. Retirement Savings - ABC News

This week for ABCNews.com, I field a reader's question about whether retirement savings should be used to pay off a student loan. The short answer: No. Read why.

In the same column, I also answer a question about contributing to a 401(k) plan after age 70.

Using 401(k) funds to pay off mortgage

In today's ABCNews.com column, I respond to a reader's question about whether 401(k) funds should be used to pay off a mortgage after a layoff. My answer in this case: Not now. I explain the ugly tax consequences of taking a big lump sum withdrawal to pay off the mortgage. My advice is to use non-retirement savings first if the family's current income is not enough to meet the mortgage payment and then non-retirement savings if necessary.

If the 401(k) funds are needed, then small monthly withdrawals are better than a single lump sum withdrawal.

Laid off with 401(k) loan due

In today's ABCNews.com column, I explain the rules requiring most laid off workers to pay off any money due on a 401(k) loan or otherwise get hit with taxes and penalties. The column responded to a Michigan woman's question about why she would be classified as in default if she doesn't come up the money to pay off the loan she borrowed from her former employer's 401(k) plan.

During the course of my research, I came across a quite interesting paper from the Federal Reserve that challenges the conventional wisdom among financial planners that taking out a 401(k) loan is always a bad idea. I may be writing more about this paper in the coming weeks.

Catching up

I've fallen behind on posting updates to my recent ABCNews.com columns. Here are links to the two latest columns:

• Cashing Out Retirement the Less Painful Way / July 7, 2009
• It's Never Too Early to Save for Your Kids / July 21, 2009   

I'm looking to return to a more regular posting schedule this week. 

When and how to collect Social Security

For the second consecutive week, a column on Social Security for ABCNews.com has triggered quite a bit of feedback from readers. Today's column outlines the basics of benefits for divorced spouses. The most important thing for folks to know is that if they were married for at least 10 years to someone who qualifies for Social Security, then they are eligible to collect benefits based on their former spouses's record.

As with all things Social Security related, there are many wrinkles to the rules, but the 10-year rule is the key thing to keep in mind.

Today's column was a follow up to last week's column stressing the importance of knowing the Social Security rules to make sure you're maximizing your benefits.

The many questions I've received in response to both columns makes it clear that many folks do not understand how Social Security works and to what they're entitled.

My advice? Poke around the Social Security web site: www.socialsecurity.gov. There, you'll find answers to almost every imaginable question.

Latest edition of "Sound Advice" newsletter published

At long last, I sent out to subscribers today another edition of my Sound Advice newsletter. Topics covered include special Social Security payments, an expanded tax credit for higher education and my expanded Financial Checkup service.

Click here if you're interested in subscribing.

401(k) withdrawal options

Today's ABCNew.com column takes a look at options for withdrawing 401(k) funds, including "in-service rollovers" to an IRA.

Last week's column touched on some lesser-known programs in the recent economic stimulus package meant to boost family finances. These include a $250 payment for Social Security recipients, a tax credit for workers and a tax break on unemployment benefits.

On the radio with NPR's "Here and Now"

As a result of my recent ABCNews.com columns, I had the opportunity yesterday to appear on the National Public Radio program "Here and Now." I discussed some of the things people should be doing in light of the current economic and investing climate. I also reviewed some of the government programs that have emerged to help individuals cope with these tough times.

"Here and Now" is produced at WBUR in Boston and airs on NPR stations across the country from Alaska to Alabama. 

Click here to listen to the interview.