Question: The company I work for has no 401k retirement plan, and has no interest in starting one. I want to save for retirement, but what are my options? I want to put away as much as possible but it seems like my only choice is an IRA. Any ideas? Michael, Chicago, IL

Answer: I would take a two-step approach to savings. First, I would take full advantage of an IRA--Roth or traditional. You can contribute a maximum of $5,000 ($6,000 if 50 and over.) I tend to prefer the Roth over the traditional IRA because of the advantages of tax-free withdrawals in retirement and its estate planning flexibility.

Second, I would supplement the money invested in the IRA with a diversified portfolio of investments in taxable accounts. (This is in addition to your emergency savings, which is parked in an online savings bank, a credit union, and similar safe, short-term investments.)

I would arrange it so that money is automatically withdrawn from your checking account every month or every two weeks into several low-fee broad-based equity and bond funds.

Of course, you'll pay taxes on any realized capital gains, dividends and interest. But you can always tap the money before retirement without paying a penalty. You will owe long-term capital gains when you cash in any securities. Still, the money will be there for you to tap in your elder years.

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