Playing It Safe, Missing the Deal of a Lifetime?

That stable-income fund has a place in your retirement portfolio, acting as a stabilizer in times like these. A stable-income fund is a conservative investment vehicle usually found in retirement plans that seeks to preserve principal and deliver higher returns than you would earn with a money market mutual fund.

Stable income or stable value funds are a good choice for cash holdings if you have access to one; however, they're not the place to park all of your retirement funds if you're 17 years out from retirement. Over the long term, that stable-income fund is not going to provide the kinds of returns needed to help you stay ahead of inflation and accumulate the nest egg you will need for retirement.

One of the best ways for every investor to recover from the investment markets collapse is to step up their investing through a deferred compensation plan like a 401(k), 403(b) or other employer-sponsored retirement plan.

In fact, I would suggest you actually step up your contributions to that deferred compensation plan from that 3 percent level. Even with your qualification for traditional pension plan, a 3 percent contribution is probably not sufficient.

If you feel you can't make a big jump now, bump the contribution up 1 percentage point now and then promise yourself to increase it one more percentage point every six months until you're in the 10 to 15 percent neighborhood. This gradual approach helps you adjust to the smaller take-home amount in each check.

Among the other issues you bring up, you mention your uncertainty about what moves to take and the transfer of your Roth IRA to Smith Barney. Start the search for help by talking to your Smith Barney broker.

By investing through a full-service brokerage firm like Smith Barney, you're paying for advice through the commissions and mutual fund fees you are assessed. Just keep in mind how that broker is compensated as it could influence his or her recommendations. If you're not getting advice helpful for your situation, then there's no reason to be paying those fees and you should look to a low-cost brokerage firm and possibly find a fee-only financial adviser.

Finally, you mention your husband is self-employed but has little saved for his own retirement. That is something that should be corrected. Even if you qualify for a pension and own bountiful retirement accounts, there should be retirement savings in his name as well. No man or woman should rely entirely on their spouse for their retirement security. Remember: Life happens and we must be prepared.

Also, as a self-employed individual, he's missing out on one of the prime advantages of business ownership. That is the opportunity to sock away more money for retirement than those who work for an employer and, as a result, save a significant amount on taxes.

As I'm sure you know, business owners get whacked by paying double on Social Security and Medicare taxes. The best way to mitigate that impact is to contribute to a retirement plan designed for small businesses as SEP IRA, SIMPLE IRA and solo 401(k) accounts. Take a look; it will be worth the time and could keep your good fortune running for many years to come.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

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