Filing for a patent: New rules to know

NEW YORK (CNNMoney) -- Charley Moore is founder and executive chairman of Rocket Lawyer, an online legal service that specializes in working with startups, small businesses and independent entrepreneurs.

As an entrepreneur, protecting your inventions against the competition is one of the most important things you need to do. If you don't, you put your hard work and good ideas at risk.

Patents are both offensive and defensive weapons in the increasingly cutthroat modern business environment. So, take a few minutes to educate yourself. You won't regret it.

Last year's America Invents Act brought the most important changes to patent law since Thomas Jefferson wrote patents into the Constitution in 1787.

Here's what you need to know.

First-to file: The new law takes us from a first-to-invent to a first-to-file system. In other words, patents are awarded to the entity that files first; the starting block is the date of application, not the date of invention. So, if you've invented something, file as quickly as possible. It's also a good idea to consult with a lawyer and formulate a game plan from the beginning.

A good plan can start with what's known as a provisional patent. They are quicker, easier and cheaper than the alternative -- a non-provisional, or full, patent. And if you file for a complete patent within one year of your provisional, you can use the provisional filing date to get ahead of the competition. (Related story: What Kodak's patents produced)

Fees: When you need to file fast, cost needn't slow you down.

There are fees for both provisional and full patents. Small entities enjoy discounted fees, however. Also, if you are a small entity, an additional fee for paper filing is cut in half. But this additional fee does not apply if businesses, regardless of size, file their patent application online.

Depending on the size of your business, the fee for a provisional patent might be as low as $125 and $530 for a full patent.

Fast track: If you really want to be speedy, there's a new fast-track option open to small entities for $4,800.

Even better, if you qualify as a "micro-entity," you might be eligible for a 50% discount. A "micro-entity" is a small entity where the applicant is not the named inventor on more than four other patent applications, and neither the applicant's annual income, nor the income of the entity, is three times larger than the U.S. median income.

Where to go: The new law requires the U.S. Patent and Trademark Office to establish at least three satellite locations by September 2014. That's a good development, because geographic diversity can make the patent system easier for small businesses to navigate.

For example, potential offices in Denver and Silicon Valley are better placed to help the inventors near them than a single faraway office in Washington, D.C. And examiners who live in the community will be more connected to local entrepreneurs and their issues.

Review process: So that's how to navigate the new "first to file" system. But what happens if you don't file first?

To be sure, in such cases, the road to protecting your invention will be longer and rockier. But all hope isn't lost. The new law includes two review processes to challenge patents you believe infringe on your idea.

The first is called a post-grant review. That gives you nine months to petition the Patent Office if you think an existing patent includes something that you invented first. But there's a catch -- the review costs $35,800. So think carefully and file quickly to avoid this situation.

The other way to challenge the validity of current patents if you were beaten to the punch is to ask the patent office for an "inter partes review."

For this review, you have nine months from the time the patent is issued, or after the end of a post-grant review. To avoid lengthy and costly battles, a ruling must be made within one year from when the patent was granted. The review costs $27,200.

--Rocket Lawyer's Eva Arevuo also contributed to this article.

First Published: October 22, 2012: 4:56 PM ET

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Clear Channel takes down voter fraud billboards

A billboard in Columbus, Ohio.

NEW YORK (CNNMoney) -- Clear Channel Outdoor said Monday that it was taking down billboards that advocacy groups claim were an effort to suppress voter turnout in minority neighborhoods.

The billboards in question, located in the swing states of Ohio and Wisconsin, warned that voter fraud is a felony punishable by jail time. Activists say the messages, funded anonymously, were concentrated in minority neighborhoods and were placed in order to intimidate potential voters into staying home.

Online petitions calling for the billboards' removal garnered more than 100,000 signatures.

"In a lot of communities where they were putting these ads up, there's already so much misinformation about voting," said Rashad Robinson, executive director of online advocacy group ColorOfChange.org.

"In a lot of these communities, there's not always a good relationship between law enforcement and the community, and particularly for first-time voters, you're raising the specter that there could be some kind of interaction with law enforcement as part of the voting process."

Jim Cullinan, a spokesman for Clear Channel Outdoor (CCO), said in an email that the firm "reviewed the situation, and in light of the fact that these billboards violate our policy of not accepting anonymous political ads, we asked the client how they would prefer to work with us to bring the boards into conformance with our policy."

"The client thought the best solution was to take the boards down, so we are in the process of removing them," he said.

The messages were displayed on 85 Clear Channel Outdoor billboards in Milwaukee, along with 30 each in Columbus and Cleveland. Cullinan declined to comment on their sponsor's identity.

The same ads are still being displayed on billboards in Cincinnati owned by another company, Norton Outdoor, ColorOfChange said. Norton did not respond to requests for comment.

Voter fraud has become a controversial topic in many states ahead of the election.

Many conservatives have backed laws requiring voters to present photo identification when they go to the polls in order to prevent voter fraud. Liberals have countered that there's little evidence that this problem exists, and that such laws are simply an effort to disenfranchise minority voters, traditionally left-leaning, who may not have government ID's.

Clear Channel Outdoor is affiliated with Clear Channel Communications, which is majority-owned by private equity firms Bain Capital and Thomas H. Lee Partners.

First Published: October 22, 2012: 6:44 PM ET

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$1 trillion in defense cuts: What you need to know

President Obama said his budget isn't "reducing our military spending -- it is maintaining it." Mitt Romney said several times he would "not cut our military budget by $1 trillion."

NEW YORK (CNNMoney) -- The looming spending cuts at the Pentagon played a starring role in Monday night's foreign policy debate.

Mitt Romney said several times he would "not cut our military budget by $1 trillion."

At issue are changes to defense spending in President Obama's budget, as well as the impending "sequester" that will hit the Pentagon starting on Jan. 2.

For his part, Obama said his budget isn't "reducing our military spending -- it is maintaining it." And, he added, the sequester "will not happen." (Related: Obama vs. Romney on defense spending)

Who's responsible for the defense cuts? Both parties in Congress and Obama approved the sequester.

The cuts are called for under the Budget Control Act. The BCA, which was signed into law in August 2011, was how lawmakers chose to resolve their bitter fight over raising the country's debt ceiling.

The original idea was to pass something so distasteful it would light a fire under lawmakers to finally negotiate a deal to reduce deficits by at least $1.2 trillion over a decade.

But a "super committee" charged with doing so failed. Under the budget law, the next step was the sequester. The cuts would be evenly divided between defense and nondefense spending.

Now, both parties and the Obama administration say the cuts are a terrible idea -- largely because they would be arbitrary and mostly across the board. (Related: Snapshot of economy under Obama)

How deep would the defense cuts be? It depends what you mean by "cuts."

To fiscal experts, a cut means spending that falls below the level authorized by Congress in the prior year -- or even spending that stays at the same level, because it hasn't been adjusted for inflation.

The Budget Control Act actually called for two rounds of changes to defense spending.

The first round, which is already in effect, would not be considered a "cut." The BCA set spending caps, which shaved $487 billion off the Pentagon budget over 10 years. But defense spending would continue to grow at the rate of inflation.

Romney says he would reinstate the $487 billion; Obama incorporated it into his budget proposal.

The second round of changes, the actual sequester, would be a real cut.

Starting in 2013, defense budget authority would be sliced by 9.4%, not including war funding. The cuts to some parts of defense would be higher because Obama has exempted military personnel and veterans' affairs from the sequester.

In dollars, the Congressional Budget Office projects that the Pentagon's base budget will fall to $491 billion in 2013, down from $554 billion in 2012. Thereafter, defense spending will grow with inflation. That would save roughly $500 billion over a decade.

"The Pentagon will still be spending more in 2013 after sequestration than it did in 2006, at the height of the Iraq war," noted Lawrence Korb, who served as assistant defense secretary under President Reagan. (Related: Romney's balanced budget pledge)

Will the cuts hurt defense? Everyone from the top brass at the Pentagon to Republican critics of the Budget Control Act has said the cuts could result in a "hollow force."

The White House budget office has noted, however, that the Defense Department would be able to shift funds to maintain critical military readiness.

Indeed, the operations and maintenance part of the defense budget -- the area that most directly affects military readiness -- is also the most fungible part. Funds can be shifted to what is deemed most important.

"This is a management issue, not a readiness issue," said Gordon Adams, who was the senior White House budget official for national security under President Clinton.

Adams said the cuts likely would be felt most heavily by general service personnel at the Pentagon through attrition and furloughs and by service contractors (those who provide everything from mess hall services to security guards).

None of that means, however, that the cuts are advisable. After all, they only exist because Congress failed to reduce deficits in a smarter way.

Why can't Congress just cancel the cuts? Easier said than done. Lawmakers need to negotiate a deal to avoid the defense cuts and the rest of the fiscal cliff -- $7 trillion in tax increases and spending cuts that start taking effect next year.

But both parties are still publicly holding the line on their demands. The Republicans want to cancel the defense cuts and head off tax increases. The Democrats want to increase taxes on the rich before they agree to replace the sequester with more gradual and less arbitrary cuts.

Just last week, the White House was signaling again that the president would not sign legislation that cancels the cuts but extends the Bush-era tax cuts for high-income taxpayers.

First Published: October 23, 2012: 1:10 AM ET

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Stocks lookahead: Tech companies' results

Click the chart for more stock market data

NEW YORK (CNNMoney) -- Markets will be abuzz this week with new product launches and corporate earnings from technology giants Apple, Microsoft, Yahoo and Amazon. Investors will also get a feel for the pulse of the economy from a GDP report and a Federal Reserve meeting.

Apple (AAPL, Fortune 500) will hold a much anticipated event on Tuesday, at which it is expected to introduce a smaller version of the iPad, dubbed the "iPad mini."

On Thursday, the tech company will report its quarterly earnings results, putting a number on how many iPhone 5's it sold since its release last month.

Related: How many iPhones did Apple sell last quarter?

Rival Microsoft (MSFT, Fortune 500) is unveiling Windows 8 with great fanfare on Thursday, a product the company hopes will combat the weak PC sales it reported last week.

A slew of other technology companies -- Yahoo, Amazon (AMZN, Fortune 500), Netflix (NFLX), Facebook (FB), Zynga (ZNGA) -- are slated to release quarterly earnings reports this week.

A closely watched one will be Yahoo (YHOO, Fortune 500)'s results on Monday, when investors will hear from its new CEO Marissa Mayer, who returned last week from a two-week maternity leave.

Related: Yahoo CEO Mayer's career advice

Facebook (FB)will release its second quarter earnings on Tuesday. Investors are anxious after the popular online game Farmville maker Zynga scaled back its outlook for 2012. Facebook depends on Zynga for a significant portion of its sales.

Facebook has had a disappointing reception on Wall Street since it went public in May. Shares of the company have lost half their value in 2012, falling to $19 per share on Friday from its initial $38.

Facebook's stock will be under more pressure, because starting Thursday the company's employees will be free to sell the restricted stock they were issued last year.

Beyond corporate news, investors will also comb through a deluge of economic data this week.

The first estimate of third-quarter gross domestic product, widely thought of as the broadest measure of the nation's economic health, will come out Friday. Investors have become cautious after the economy's pace of growth had slowed in the previous quarter.

The Federal Reserve's Federal Open Market Committee will wrap up a two-day meeting Wednesday. The central bank is expected to share its insights into the U.S. economy, which will impact how long it plans to continue its quantitative easing program to buy $40 billion in mortgage-backed securities each month.

"The Fed is going to have to continue to justify quantitative easing, most likely by emphasizing the weakness in the job market," said Peter Cardillo, chief market economist at Rockwell Global Capital.

The housing market will also be in focus, with reports on mortgages, new home sales, home prices and pending home sales due out throughout the week.

Investors will also get a glimpse at how consumers are feeling leading up to the holiday season when the Michigan sentiment report for October comes out Friday.

Despite Friday marking the worst day on Wall Street since June, U.S. stocks ended the week mixed. The Dow Industrial Average and S&P 500 eked out gains of 0.3% for the week, while the Nasdaq dropped 1.2%.

First Published: October 21, 2012: 2:58 PM ET

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Google threatens to drop links to French media sites

NEW YORK (CNNMoney) -- Should search engines like Google have to pay publishers like newspapers for linking to their content? France says yes, Google says no -- and it's prepared to go nuclear on the issue.

Google executives met with French government officials on Friday to discuss the company's threat to drop French media sites from its search results if France goes through with a proposal to make search engines pay commissions for links to news content.

The owners of many French newspapers are in favor of the tax, believing their revenue and copyrights are compromised when Google's search results display their content. French Culture Minister Aurelie Filippetti seems to agree. She told a parliamentary commission it is "a tool that it seems important to me to develop."

Google says that such a law would "threaten its very existence," according to a letter it sent to several French officials. The letter was first publicized by French news service Agence France-Presse, which obtained a copy. Google later posted the full letter on its European blog.

Google (GOOG, Fortune 500) says in the letter that it "cannot accept" such a move, and consequently would be forced to stop referencing French sites.

Google's representatives met in Paris with Fleur Pellerin, the French Minister for small business, innovation and numeric economy, according to Arnaud Guillois, a spokesman for the French embassy in Washington.

France isn't the only country in Europe to propose such legislation. Germany is considering a similar law.

Such rules "would be very damaging to the internet," Google said in its blog post.

First Published: October 21, 2012: 7:45 PM ET

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Fast food sales slow in China

NEW YORK (CNNMoney) -- China took a bite out of junk food in the third quarter.

Last week, Coca-Cola (KO, Fortune 500) said that sales in China grew an anemic 2% compared to 11% a year ago. Shares of the world's largest beverage company lost more than 2% for the week.

China's love affair with fried chicken also took a hit. KFC parent Yum Brands (YUM, Fortune 500), which also owns the Taco Bell and Pizza Hut brands, saw same-store sales growth in China decline to 6% from 19% last year.

It was more sour news for the world's biggest fast food chain McDonald's (MCD, Fortune 500). The company posted its worst quarterly restaurant sales growth in 9 years, sending shares more than 4% lower.

The company didn't break out China sales, but said sales at restaurants open for at least one year in the Asia/Pacific region increased a meager 1.4%.

The outlook doesn't look any better for the fourth quarter, according McDonald's CEO Don Thompson. said

"Global economies remain challenging and our comparable sales for October are currently trending negative," he said on a conference call.

The disappointing numbers are likely a result of the slowdown that's been slamming the Chinese economy. Last week, the National Bureau of Statistics said that China's economy slowed last quarter to its lowest level since early 2009.

Manufacturing has continued to slump and the country's equity markets have also taken a hit. The Shanghai Composite is on track for its third straight annual decline.

Related: Candidates talk tough on China

Across the board, analysts say that companies with multinational exposure to Asia have been reporting weaker earnings.

"What we've seen is that those companies that are more U.S. focused have surprised on the upside, and those that have more of a more global bent have had more difficulties," said Paul Zemsky, chief investment officer at ING Investment Management.

First Published: October 21, 2012: 4:43 PM ET

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Maxed out my 401(k). What next?

NEW YORK (Money Magazine) -- I'm in my mid-30s and max out my 401(k) and a Roth IRA every year. I also invest $4,500 a year in mutual funds. What more should I be doing to prepare for retirement? Should I invest in individual companies in addition to funds? -- Brian B., Jacksonville, Fla.

Sounds like you're already taking the most important steps to get on the path to a secure retirement. You're saving on a regular basis, maximizing tax-advantaged options -- you're even going above and beyond by investing a substantial sum in a taxable account each year.

Assuming all that saving amounts to a reasonable percentage of your annual income -- say, 15% or so -- I don't think you need to make any radical changes.

That said, you may be able to enhance your retirement prospects by improving your retirement-planning strategy a bit. The key, though, is concentrating your efforts in areas that are likely to have the highest payoff.

Here's what I recommend:

1. When it comes to investing, keep it simple. Unless you believe you have unique insights into the financial prospects for specific companies, I'd pass on investing in individual stocks. Without an edge, you're not likely to outperform the market averages, and you could end up dragging down your returns.

Similarly, ignore the endless variety of niche funds and ETFs that investment firms constantly churn out. Here, I'm talking about funds and ETFs that home in on particular sectors of the market -- oil, gas, platinum, gold, currencies, individual foreign countries, etc. -- or that employ risky or arcane investing techniques, a la inverse funds and leveraged ETFs. It's tough to integrate such investments into your portfolio in a coherent way, and they're ultimately not worth the extra expense and effort.

Related: Ground rules for retirement investing

Instead, focus on building a straightforward portfolio of broadly diversified stock and bond funds that will give you exposure to all areas of the market. For guidance on how to divvy up your money -- between stocks and bonds overall and among particular types of stocks and bonds -- just plug the ticker symbol for the Vanguard target-date retirement fund designed for someone your age -- in your case, the 2040 (VFORX) or 2045 fund (VTIVX) -- into Morningstar's Portfolio X-Ray tool. You don't have to mimic its allocations precisely, but you probably don't want to stray too far from them either.

2. Aim for lower costs. Your best shot at boosting your returns without taking on additional risk is to invest as much as possible in low-expense funds. Generally, that means looking for stock funds that have expense ratios below 1% and bond funds with expense ratios less than 0.75%. You can do even better, though, by sticking to low-cost index funds and ETFs like those on the MONEY 70 list of recommended funds.

Of course, in your 401(k) you're limited to the menu of investments offered by your plan. But by perusing the fee disclosure the Department of Labor now requires plan sponsors to provide, you should be able to sift through your 401(k)'s investment roster and choose reasonably priced options.

3. Beware investment pitches based on tax benefits. After investing all you can in tax-advantaged 401(k)s and IRAs, you can plow any extra savings into taxable accounts, as you're already doing to the tune of $4,500 a year.

Just be careful. Many advisers are quick to recommend variable annuities or life insurance investments for taxable accounts because of their potential tax savings. Problem is, these options typically come with high fees, not to mention a mind-numbing level of complexity.

Related: The case for investing in bonds, too

A better solution is to stash any saving you do outside 401(k)s and IRAs in tax-efficient investments like index funds, ETFs and tax-managed funds. You'll likely pay far lower expenses, which will give you a better shot at a higher after-tax rate of return.

4. Save more as your income rises. There's a natural tendency for people to ratchet up their lifestyle at a faster rate than their paycheck as it grows. But that can lead to problems come retirement time. The reason: As your income climbs, the percentage of your pre-retirement salary that Social Security will replace starts to shrink.

So the more you earn during your career, the more you'll have to depend on your personal savings to maintain your standard of living in retirement. To avoid having to scale back your lifestyle during retirement, try to increase the percentage of your income you save as your earnings increase.

5. Monitor your progress. Over the course of a career, any number of setbacks -- layoffs, market downturns, etc. -- can derail even the best laid retirement plans. That's why it's crucial to evaluate how things are going and make adjustments if necessary.

You can do that several ways. One is to periodically assess the balance of your retirement accounts relative to your annual income. Another is to rev up an online calculator like our Retirement Planner. The important thing, though, is that one way or another you come away with a realistic sense of whether your current saving and investing plan is working and, if not, make the necessary tweaks to put you back on track.

You already appear to be off to an excellent start in your retirement planning. And if you follow these five tips, your chances of making a smooth transition from the work-a-day world to your post-career life should be just as upbeat.

First Published: October 19, 2012: 3:46 PM ET

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Recall: Sunscreen could burst into flames on skin

Maybe not so great for your active lifestyle.

NEW YORK (CNNMoney) -- A recall is underway for Banana Boat products that could give new meaning to the word sunburn.

Energizer Holdings (ENR), the consumer goods conglomerate that produces Banana Boat products, announced Friday that certain of the brand's sunscreen sprays may potentially burst into flames on users' skin if they come in contact with a flame or spark before the spray is completely dry.

Energizer said it has received reports of four "adverse events" in which the sprays have caused burns in the U.S., and one in Canada. The company said it believes the problem stems from the fact that the spray valves on the products in question dispense more than is typical in the industry, meaning that the spray takes longer to dry.

"If a consumer comes into contact with a flame or spark prior to complete drying of the product on the skin, there is a potential for the product to ignite," Energizer said in a statement.

Related: Ford recalls 2013 Escaps for serious fire risk

Consumers who have purchased the Banana Boat sprays subject to the recall are being advised, obviously, not to use them. Click here for a full list of affected products.

Energizer said it is ordering retailers not to sell the sprays and has notified the Food and Drug Administration.

First Published: October 19, 2012: 3:52 PM ET

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Bankrupt car battery maker spurs China-U.S. bidding war

A123 may be in bankruptcy court, but it is still subject to a bidding war for its assets.

NEW YORK (CNNMoney) -- Lithium battery maker A123 Systems may have been forced to file for bankruptcy protection this week, but the company is still attractive enough to spark a bidding war for its assets.

A123 (AONE), a major supplier to the U.S. electric car industry and recipient of $249 million in government stimulus funding, announced Tuesday that it had filed for bankruptcy.

The same day, A123 said it had entered into a $125 million deal for the sale of its automotive assets to U.S. parts maker Johnson Controls (JCI, Fortune 500). As part of the deal, Johnson Controls agreed to provide A123 the funding it needs to operate during bankruptcy reorganization.

But Chinese auto parts maker Wanxiang Group went to federal bankruptcy court in Delaware on Thursday, arguing it has a better offer for A123 already on the table, and seeking to be the one to provide bankruptcy financing to A123.

Earlier this year, Wanxiang agreed to pay $465 million for a controlling stake in A123. But the deal ran into government opposition due to the investment in the company by the Energy Department and the company's contracts with the U.S. Defense Department.

Bankruptcy judge Kevin Carey gave the first round to Johnson Controls on Thursday, allowing A123 access to the first $15 billion of financing from Johnson Controls -- once Johnson Controls agreed to cut the interest rate to match the offer from Wanxiang (see correction below).

But a decision on who will get to buy the assets, and at what price, is still pending before the court, which is charged with getting the best deal possible for creditors.

Related: A123's bankruptcy -- Good for America

Michael Lew, analyst with Needham Co., said the bidding war is proof that no matter what financial problems forced A123 into bankruptcy, the industry sees it as a valuable business going forward.

"Electric cars aren't a good value proposition right now. But over time the market will evolve," said Lew. "Johnson Controls' interest validates A123's business."

Related: Year of the electric car blows a fuse

Lew said he believes there could be additional bidders for A123 before the issue is settled, and that it's difficult to predict who will win. He said while Wanxiang might have the more lucrative offer at the moment, the deal could be rejected if the bankruptcy court determines it won't win regulatory approval.

"Their offer is bigger, period. But there is a concern about all of the IP [intellectual property] going to China," he said.

Related: Smart's electric car might actually be...smart

Neither Johnson Controls nor A123 responded Friday to requests for comment on the bidding war, and Wanxiang could not be reached for comment.

Correction: An earlier version of this story incorrectly stated the amount of financing available to A123 from Johnson Controls. It is $15 million not $15 billion.

First Published: October 19, 2012: 2:55 PM ET

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Maxed out my 401(k). What next?

NEW YORK (Money Magazine) -- I'm in my mid-30s and max out my 401(k) and a Roth IRA every year. I also invest $4,500 a year in mutual funds. What more should I be doing to prepare for retirement? Should I invest in individual companies in addition to funds? -- Brian B., Jacksonville, Fla.

Sounds like you're already taking the most important steps to get on the path to a secure retirement. You're saving on a regular basis, maximizing tax-advantaged options -- you're even going above and beyond by investing a substantial sum in a taxable account each year.

Assuming all that saving amounts to a reasonable percentage of your annual income -- say, 15% or so -- I don't think you need to make any radical changes.

That said, you may be able to enhance your retirement prospects by improving your retirement-planning strategy a bit. The key, though, is concentrating your efforts in areas that are likely to have the highest payoff.

Here's what I recommend:

1. When it comes to investing, keep it simple. Unless you believe you have unique insights into the financial prospects for specific companies, I'd pass on investing in individual stocks. Without an edge, you're not likely to outperform the market averages, and you could end up dragging down your returns.

Similarly, ignore the endless variety of niche funds and ETFs that investment firms constantly churn out. Here, I'm talking about funds and ETFs that home in on particular sectors of the market -- oil, gas, platinum, gold, currencies, individual foreign countries, etc. -- or that employ risky or arcane investing techniques, a la inverse funds and leveraged ETFs. It's tough to integrate such investments into your portfolio in a coherent way, and they're ultimately not worth the extra expense and effort.

Related: Ground rules for retirement investing

Instead, focus on building a straightforward portfolio of broadly diversified stock and bond funds that will give you exposure to all areas of the market. For guidance on how to divvy up your money -- between stocks and bonds overall and among particular types of stocks and bonds -- just plug the ticker symbol for the Vanguard target-date retirement fund designed for someone your age -- in your case, the 2040 (VFORX) or 2045 fund (VTIVX) -- into Morningstar's Portfolio X-Ray tool. You don't have to mimic its allocations precisely, but you probably don't want to stray too far from them either.

2. Aim for lower costs. Your best shot at boosting your returns without taking on additional risk is to invest as much as possible in low-expense funds. Generally, that means looking for stock funds that have expense ratios below 1% and bond funds with expense ratios less than 0.75%. You can do even better, though, by sticking to low-cost index funds and ETFs like those on the MONEY 70 list of recommended funds.

Of course, in your 401(k) you're limited to the menu of investments offered by your plan. But by perusing the fee disclosure the Department of Labor now requires plan sponsors to provide, you should be able to sift through your 401(k)'s investment roster and choose reasonably priced options.

3. Beware investment pitches based on tax benefits. After investing all you can in tax-advantaged 401(k)s and IRAs, you can plow any extra savings into taxable accounts, as you're already doing to the tune of $4,500 a year.

Just be careful. Many advisers are quick to recommend variable annuities or life insurance investments for taxable accounts because of their potential tax savings. Problem is, these options typically come with high fees, not to mention a mind-numbing level of complexity.

Related: The case for investing in bonds, too

A better solution is to stash any saving you do outside 401(k)s and IRAs in tax-efficient investments like index funds, ETFs and tax-managed funds. You'll likely pay far lower expenses, which will give you a better shot at a higher after-tax rate of return.

4. Save more as your income rises. There's a natural tendency for people to ratchet up their lifestyle at a faster rate than their paycheck as it grows. But that can lead to problems come retirement time. The reason: As your income climbs, the percentage of your pre-retirement salary that Social Security will replace starts to shrink.

So the more you earn during your career, the more you'll have to depend on your personal savings to maintain your standard of living in retirement. To avoid having to scale back your lifestyle during retirement, try to increase the percentage of your income you save as your earnings increase.

5. Monitor your progress. Over the course of a career, any number of setbacks -- layoffs, market downturns, etc. -- can derail even the best laid retirement plans. That's why it's crucial to evaluate how things are going and make adjustments if necessary.

You can do that several ways. One is to periodically assess the balance of your retirement accounts relative to your annual income. Another is to rev up an online calculator like our Retirement Planner. The important thing, though, is that one way or another you come away with a realistic sense of whether your current saving and investing plan is working and, if not, make the necessary tweaks to put you back on track.

You already appear to be off to an excellent start in your retirement planning. And if you follow these five tips, your chances of making a smooth transition from the work-a-day world to your post-career life should be just as upbeat.

First Published: October 19, 2012: 3:46 PM ET

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