How to get where you want to be?

Although your social security benefits and your pension plan may offer you some help, most likely your savings and investments will provide the bulk of your income in retirement. And the key percentage of that amount should come from stocks. Regardless of the iffy-ness of the market, it generally increases. Large and small cap stocks are the top producers at over 10 per cent. Bonds and treasury bills are 5 per cent or under.

Although the market risk is greater, the reward is significant. Research shows that over the past two hundred years, stocks have beaten bonds in return about eighty per cent of the time. Stocks generally beat inflation when held on to for more than fifteen years. Bonds do not.

Your retirement investment is a long term proposition so stocks should occupy a large per cent of your portfolio. Keep the amount of money you will need for the following year in savings, the next five years in bonds or CDs, and the next ten years in stocks. Although the exact proportion is up to you, allocate according to the amount of relaxed sleep you need.

Now look at the specifics on your retirement investments.

First stop is your employer plan that matches your contributions. After all, they are giving you money that you have to keep your hands off until retirement as the only string attached. These plans are tax deductible, tax deferred, and automatically taken out of your salary before getting into your grubby little hands and can range up to $15,000.

If your employer does not offer this benefit, look at Roth IRAs for tax free growth. You will pay taxes now on your contributions, but not when you retire. Roth IRAs give you control over where the investments go, although you will have to pay a broker to accomplish them. Plus Roth IRA accounts can be left alone even when you reach 70.5 unlike the traditional IRA and employer plans. The max on investment per year in a Roth is $4,000. In 2008, it will go up to $5,000.

Your employer may offer a pension plan without matching any contributions. It's pre-tax money automatically invested for you. Not bad.

Traditional IRAs are taxed only when you use the funds and are tax deductible if you don't have any plan from your employer or if your income is not above $50,000 for singles, $70,000 for married couples (although these limits change every year — check with the IRS). Your contribution limits are about $4,000 per year.

If you have gone the limit on the above, then look to taxable options. Annuities are not a great way to invest for retirement, except for the agent that sells the plan and the wage earner who has already maxed out on their tax deductible investments.

Start as soon as your first paycheck and invest to the limits. But even if retirement is closer than you would like to admit, it is never too late. Take advantage of any employer contribution matching plans. Look to stocks to provide long term growth.