I've always imagined that one of the great joys of belonging to a Socialist group would be not worrying about the well-nigh incomprehensible fluctuations of the stock market. While other people may lose sleep over the screaming highs and soul-crushing lows of the capitalist economies, hard-core socialists just have to worry about plebian things like political purity, the potato harvest, and whether or not the shops currently have razor blades in stock.

With that in mind, I feel somewhat sorry for the Provisional Irish Republican Army. While they rejected the Communist tendencies of the "Official" IRA in the 1960's, they still self-identified as a "non-Marxist Democratic Socialist" organization. However, when they signed a ceasefire in 1997, they rebelled against this identity and invested their funds in the property market and, subsequently, in high-high-dividend deposit accounts in the U.S. According to some reports, Wall Street's recent meltdown may have cost the former terrorist group as much as $274 million.

Needless to say, IRA financial advisors are currently "in a state of panic," as they are watching their funding (and potential political power) evaporate. There is no word yet on whether or not Baader-Meinhof, Shining Path, or Black September were invested in the market!

This post is part of a series where retirement expert Dan Solin offers simple answers to the ten toughest retirement questions. See all 10.

Q: How should I proceed to withdraw funds I need in retirement?

A: Once you have retired and need to start tapping into your retirement savings, you have a number of options to consider.

You can take a periodic or lump sum check from your 401(k) or similar plan. Or you can rollover your plan into a traditional or a Roth IRA or into an annuity. Each of these options has tax consequences which you should discuss with your tax advisor.

The first place you should look when considering where to start taking withdrawals is the account that will trigger the least taxes.

For example, withdrawals from your Roth IRA will be tax free because you invested with after-tax dollars. While you are still in a higher tax bracket, withdrawing money from your Roth IRA or other non-taxable assets is sound financial planning.

This post is part of a series where retirement expert Dan Solin offers simple answers to the ten toughest retirement questions. See all 10.

Q: How do I choose between a 401(k) plan and an IRA?

A: You don't necessarily have to make a choice, since you are permitted to invest in both an 401(k) and an IRA, subject to limits on the amount of your contributions to each plan.

Most investors should contribute the minimum amount to their 401(k) required to trigger the maximum employer match.

Once you have maxed out your 401(k), consider a Roth IRA.

While contributions to a Roth IRA are not tax deductible, there is no penalty for early withdrawals up to the amount contributed, and no tax on investment earnings once you reach age 59 ½.

Today's Wall Street Journal reports (subscription required) that demand for gold from IRA investors is on the rise as the precious metal's value has soared on concerns about inflation, the weakening dollar, and the credit crunch.

According to the Journal, "George Cooper, senior account executive with Centennial Precious Metals, has been handling gold IRAs for 17 years. Back in the mid-1990s, he said he might get one such call every month or two. Now he said he gets up to 50 inquiries daily."

In his book Hot Commodities, Jim Rogers warned that the sign of a top in a market is when speculative money chasing past performance starts to pour in. The flow of IRA money into gold should be seen as a sign of caution for investors.

Remember: gold has been a strong performer of late but its long-term track record. In a letter, S&P's Paul Konstadt wrote that "The price of gold in the US was fixed at the end of WWII and deregulated only in August 1971. Someone who had invested in gold at that time would have had a total return of about 3% per year after inflation from then until now."

Gold doesn't pay dividends and is incredibly difficult to value: it produces no reliable stream of cash and fluctuates based on speculation rather than actual need.

I'd be very careful about jumping on the gold bandwagon, especially in my IRA.

Ted Allrich is the founder of The Online Investor and author of Comfort Zone Investing: Build Wealth And Sleep Well At Night. In this weekly column, he offers advice to investors who are just getting started.

A new year always holds great promise. Resolutions are made. Intentions are strong. Still each year, as the days pass, resolve wanes and soon we're back to our old ways. This year be different. Here's a chance to make some investing resolutions, act on them, and have a positive impact on your wealth.

First, pay off credit cards. This is the one of the strongest investments you can make because credit card debt can hit as hard as 18% or higher. Very few stocks make 18% or better. The average return for large stocks is 10% a year, for small stocks 12%. You do the math, and you'll find a focus on paying off credit cards is best.

Second, fund your matching IRA program at work on January 1, if you can. This truly is free money. If your company matches your contributions to your retirement account, the sooner you get that money (and yours) working, the more money you'll make. If you earn 7% interest from January 1st, by the end of the year, you'll have more money than if you start on Feb 1 or April 15 or any other, later date. Get your IRA funded as a priority, even if you don't have a matching program with your employer. You'll earn more on the contribution the sooner it's made.

A piece in The New York Times look at the increasing willingness of investors to get creative with their IRAs. Consider this amusing example:

BRIAN HARRIS makes a 30 percent annual return on his Roth individual retirement account, but his money is not invested in a soaring biotechnology stock or a hot currency fund.

Instead, Mr. Harris, a music teacher from Tucson, owns about 25 marimbas, xylophones and timpani. Using the money in his retirement account, Mr. Harris buys the instruments for less than $1,000 each. He then rents them to his students for up to $60 a month. The rental income flows straight back into the I.R.A.

Hmm .... While that sounds tempting, there are ample reasons for most investors to avoid these self-directed IRAs. For starters, you're unlikely to be able to achieve much diversification owning traditional real estate or similar assets in an IRA -- If you want real estate exposure, go with a portfolio of REITs. The idea of investing in racehorses through an IRA seems insane. This is supposed to be your retirement money!

The best bet for an IRA remains low-cost index mutual funds. There are plenty of places for more speculative and creative investments -- the IRA isn't one of them. In addition, unless you have a ton of money in your IRA, the transaction costs of alternative investment will probably be prohibitively high.

A piece in Saturday's New York Times look at the question: When is it OK to tap into retirement money early? The article sums it up eloquently: "Most Americans have enough difficulty building up a nest egg, and cracking it prematurely could mean living on cat food (slang for Social Security) later."

One of main problems with taking out retirement money early is that the IRS typically charges a 10% penalty, depending on the type of account. In a ROTH IRA for example, you can take out your principal any time you like because the money has already been taxed as income. But with a traditional IRA or 401(k), you'll be hit with a hefty penalty.

As you may know, I'm not a big proponent of active trading. The commissions costs aside, you will need to beat the market by an extremely wide margin pre-tax in order to outperform an index fund after-tax. Remember, short-term capital gains are taxed as ordinary income.

But, investments you hold in a ROTH IRA accumulate tax free. So if you're going to trade, it is absolutely essential that you do so in your ROTH IRA. This may seem contradictory -- aren't you supposed to be conservative with your retirement money? Well yes, you are. But if you trade actively, you may be better keeping your retirement money in safe investments in taxable accounts (The taxes will likely be fairly minimal anyway) and do your active trading in the IRA. In other words, just because it's called an IRA account doesn't mean you should be conservative there.

TheStreet's Richard Moore has a nice piece about how he trades his IRA. Remember, the best strategy is probably not to do any trading at all, taxes or no. But if you do, a tax-free account is probably the place to do it.

To quote Balzac, "Laws are spider webs through which the big flies pass and the little ones get caught." For evidence that this is still true, one need look no further than today's New York Times, which reported on a growing and disturbing trend among hedge fund managers evading taxes on their giant paydays. Here's how it works, according to the article:

A lot of the hedge fund managers earning the astronomical paychecks making headlines these days are able to postpone paying taxes on much of that income for 10 years or more.

The key to the hedge fund tax boon is that many managers of these lightly regulated private pools of capital have the ability to earn the bulk of their compensation offshore and invest it in their funds, where it grows tax-free.

Meanwhile, working Americans can only put up to around $20,000 per year into 401(k)s and IRA's. John Bogle, as always, sums it up best: "We pile advantage on advantage for these managers and there doesn't seem to be any economically logical basis for it. It's a very well-gilded lily to allow these tax deferrals."

Congress is looking to tackle this problem, and I hope that they will do something. How can the government possibly tell a middle-aged couple that they can only put a few thousand dollars a year in an IRA to save for retirement when hedge fund managers are squirreling away millions?