Your retirement nest egg is just that: Money "surrounded by an eggshell. It can only be broken open once," says retirement expert Ed Slott.

Slott should know: He appears on PBS and conducts seminars nationally for financial advisers just on how to withdraw money from retirement accounts.

The laws are so complicated that his seminars last for days and include hundreds of pages of annual changes surrounding retirement-money rules.

What are some of the myriad mistakes retirees and their heirs make when cracking open that egg?

Slott lumps missteps into two categories: mistakes that can be fixed and what he terms "fatal errors" when taking money out of accounts such as IRAs, 401(k)s, 403(b)s, and employer retirement plans.

"I teach folks who come to our seminars how to tell the difference and how to avoid those mistakes," he says.

"Any time money comes out of a retirement account, that money is subject to rules that no other money is subject to. Your retirement account is an eggshell. You break it, it's over. And there are many advisers who don't know the rules or don't ask the right questions."

First-time errors

Some common mistakes? Inherited IRAs and automatic roll-overs.

Let's say your child or beneficiary inherits an individual retirement account worth $300,000 and doesn't set up a properly titled inherited IRA.

That could be a costly omission. The rules are strict and complex because this money hasn't been taxed yet - and the government wants its share.

Most companies offer a retirement option. When you leave a company, it may simply advise you to roll over that account into a personal IRA.

That, too, could be a mistake, Slott says.

"Let's say you have creditor issues, you've been sued. If your money remains with the company in an ERISA [Employee Retirement Income Security Act] plan, it's creditor-protected. You lose that protection if you roll it over to an IRA. Now, creditors can grab it. Always ask whether there are creditor issues or whether the IRA is protected under state law" before rolling it over, he says.

In a company retirement plan, you can own life insurance. But if you roll over that plan, you may not be allowed to own the insurance in a personal IRA.

"Suddenly, you have life insurance in your plan and you lose it," he says. Better to discuss that with a qualified financial adviser beforehand.

Are the beneficiaries of your retirement money up to date? That can have a huge impact after your death.

"Most people never look at the beneficiary forms, so our advisers go through a life-event checklist. We ask clients if they're aware of any births, deaths, divorces, new tax laws, any factor you relied on to name a beneficiary has to be looked at," Slott adds.

P.S.: Beneficiary forms on retirement accounts trump a written will, he says.

If a retirement account ends up as part of your estate, the IRA or other account may have to be cashed out - and that means paying taxes.

"This tax-advantaged money is different than any other money and can't be transported easily," Slott says. "Other assets can transfer back and forth, but IRAs can't - otherwise, that triggers taxes."

Slott's seminars include topics that most advisers haven't thought of. For instance: What if a client who turns 701/2 becomes ill or disabled and can't take the required minimum distribution?

"Sometimes, people take an RMD from one account and think it applies to all of them. It doesn't," he says.

Other mistakes are fatal: A beneficiary can't be found, or the wrong person is named. A prenuptial agreement has confused the issue, or there are no spousal-consent forms.

Finding an adviser

Slott's website,, has a list of local advisers who have been trained at his seminars.

Joel Goodhart, founder of BIRE Financial Services in Plymouth Meeting, has Slott on retainer.

"I call him my 'Slott machine,' " Goodhart says, "because when IRA rule changes happen, we know about it within the hour. And we need that for our clients."

Rosemary Caligiuri, managing director of United Capital in Langhorne, has been taking Slott's retirement seminars for years. She has what she calls a "cheat sheet" of questions for her clients and rules surrounding how to take money out of retirement accounts.

This year, for example, "there are new rules on charitable giving. The IRS requires an RMD made for charity be sent directly with an assignment form to the charity. It counts as an RMD, but the client doesn't pay tax on the distribution," Caligiuri says.

Other thorny issues: People think they can withdraw money from one IRA to satisfy withdrawal requirements on another account, say a 401(k) or 403(b). That's not always so.

"Only a 401(k) withdrawal can satisfy a 401(k) RMD. It's like from like - and these are the types of rules we go over with our clients," she says.

If you don't know the rules, "the penalties are terrible," Caligiuri says. "If you don't satisfy the amount, the IRS can audit your tax returns, and they are looking at this issue lately because many people are under-withdrawing. And trust me, the IRS is checking."

215-854-2808 @erinarvedlund