With both of our DS's we just had them cleaning as far as it would go.As Boomba said sometimes it doesn't retract; I think from memory they were about 2 or 3 when it started coming back a bit? they shouldn't force it back, just go with it.
Oh, and be careful about soap - you don't want soap under there that's not rinsed
i still offer a reminder to DS2 sometimes, as in just ask him if he's washed under there.