While many Americans have valid reasons for raiding their 401(k) during their working years, these early withdrawals can have dire consequences in retirement. Fees and penalties for early distributions can further eat away at your retirement account balance. About 15 percent of 401(k) participants spend some of their nest egg before they’re ready to leave the workforce, according to new Government Accountability Office report. The study identifies 3 major ways money leaks out of 401(k)s before retirement and how much each one affects your financial security.

Cashouts

When you leave your job you are given an opportunity to cash out your 401(k). American workers took about $74 billion from their retirement accounts when they job hopped in 2006. But when you cash out a 401(k), typically 20 percent of your account balance is withheld by your employer to pay for federal and state income taxes now due on the amount withdrawn and account holders under age 59.5 must also pay a 10 percent early withdrawal penalty.

401(k) participants who voluntarily cashed out their entire account balance at the time of job separation experienced a larger reduction in their retirement savings over their career than any other type of 401(k) withdrawal, GAO found. For example, a 401(k) participant born in 1970 who began saving 6 percent of his pay annually for retirement at age 21 plus a 3 percent employer match would typically accumulate $588,049 by age 65, according to GAO calculations. But if that same participant cashed out his nest egg at age 35 when he changed careers and paid the resulting tax penalties, he would have only $404,431 at retirement age. And that’s assuming he immediately gets a new job and saves the same amount with an

NEW YORK (TheStreet) -- Warren Buffett has long talked about investing in companies with wide "moats." Such businesses dominate their markets for years because of advantages that competitors cannot duplicate.

Longtime Buffett favorites include such powerhouses as Coca-Cola and American Express, companies that can maintain fat profit margins because of their strong brands and unique products.

Recently, Morningstar analysts studied funds that invest in stocks with wide moats. They found that the funds proved relatively resilient during the rough markets of the past year. For many investors, top wide-moat funds could make intriguing holdings that might stabilize portfolios.

The fund study was based on Morningstar's stock-rating system, which evaluates the moats of 2,000 companies. Stocks are rated as having a wide moat, narrow moat or no moat. In order to be ranked in the wide-moat category, a stock must have high returns on capital that can be attributed to factors such as patents or huge economies of scale. Companies with no moats tend to have skimpy profits and tough competition.

For the study, researchers rated funds according to the number of wide-moat stocks they held. Of the 18 funds with the highest concentration of wide-moat stocks, 17 outperformed their categories by wide margins during the downturn of 2008.

One of the top performers in a dismal year was Jensen, which takes stocks that only have long records for delivering high returns on equity. Portfolio holdings include such profit machines as Microsoft and